Many small businesses would like to provide their employees with a health benefits plan, the cost of hiring an employee and providing both mandatory and optional benefits can very intimidating. While the multiple will differ by industry, some experts calculate it costs the employer about 150% of the employee’s salary or wages. So, if you are paying someone $30,000 a year to work for your business, the total cost of that hire may end up around $45,000 once you factor in these obvious and not-so-obvious expenses. Things change once you hire your first employee. As an employer, you will have to remit Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax deducted from your employee’s income, along with your share of CPP contributions and EI premiums.
Now add the cost of a benefits program?
When covered by a benefits plan, workers are less distracted by concerns about medical expenses. They know they are valued by their employer which allows them to be more focused on their jobs and feel greater loyalty and commitment towards their employer. Dan Lawrie Insurance Brokers offers plans for groups with as few as two employees, including businesses that are family owned, operated, and staffed. These plans are an affordable way to offer more protection to your current employees and create a more appealing workplace when competing for new talent.
Grow your business with benefits
- When you implement a benefits program, you will discover an affordable way to offer added protection to your employees and their families,
- gain a competitive edge when seeking the very best employees, add to your overall employee compensation in a tax-effective way (employer paid benefit premiums are a tax deduction),
- and increase employee satisfaction. Satisfied employees tend to be more positive, focused and committed,
- all of which support a higher quality of work and increased productivity and competitiveness
Today’s benefits plan sponsors must also recognise and wrestle with the fact that there’s only so much money available. Changing demographics in Canada’s active workforce would suggest it’s time to examine the social contract that exists between employers and employees. What have plans covered in the past? Is this sustainable?
One area of growing concern is the cost associated with rapidly rising paramedical services, which require plan sponsors to pay for services that require little, if any, documented proof of actual medical need. Is this sustainable or even wise? One of the ways to handle this kind of benefit is to introduce a Health Care spending account. The account allocates fixed amount of money to each employee and allows the employers to budget what their cost will be annually. The benefit to the employee is that they choice how they will spend the money on their health care.
Please contact me if you would like to discuss how you can provide benefits for your small business.