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Professional Service Agreement

Communicating Employee Benefits

One way an employer can show employees the total value of their benefits and compensation package is to present a total compensation statement. These statements are normally distributed to employees on an annual basis. Total compensation statements give employees information on the complete pay package, including both direct and indirect compensation. Direct compensation can be defined as all compensation (base salary and incentive pay) that is paid directly to an employee. Indirect compensation is compensation that is not paid directly to an employee and is calculated in addition to base salary and incentive pay (e.g., the employer-paid portions of health/dental/vision insurance, retirement benefits, educational benefits, relocation expenses, vacation, and other paid time off). The more detail that an employer can provide, the more beneficial the statement. Some common items to include in a total compensation statement are:

  • Salary/hourly rate
  • Medical benefits coverage-include amount paid by employee and employer
  • Flexible spending account information
  • Paid leave-vacation, sick leave, PTO, holidays, bereavement leave, jury duty, etc.
  • Disability insurance
  • Life insurance
  • Employee assistance program
  • Retirement benefits-include 401(k)/403(b), pension plans, etc.
  • Educational assistance programs
  • Relocation expenses

SESCO Management Consultants can assist you in developing total compensation statements for your employees. You may contact us by phone at 423-764-4127 or by email at