Entrepreneurship and Small Business Management

Employee Benefits

Your business may offer several employee benefits, such as health and dental insurance, life insurance, pensions, paid vacations and holidays, unemployment insurance, and sick leave. The total of the benefits may be figured as a percent of the annual gross pay.

1.		The personnel department of McMaster, Inc. is reviewing employee benefits. Hillary's annual salary is $19,650.00. Her benefits package, including various insurance plans and time off, totals $7,547. Hillary's benefits are what percent of her annual salary?
			A)	41%
			B)	29%
			C)	38%
			D)	22%
2.		If your employee's annual salary is $30,000 and his total benefits are $8700, what is the rate of benefits?
			A)	25%
			B)	29%
			C)	32%
			D)	19%
3.		If your employee's annual salary is $45,219 and her total benefits are $11,000, what is the rate of benefits?
			A)	42%
			B)	38%
			C)	24%
			D)	28%
4.		Claire's benefit package consists of $593 for vacations and holidays, $1,280 for health insurance, $1,582.39 for retirement, and $2,104.23 for sick leave. What are Claire's total benefits?
			A)	$5,559.62
			B)	$4,966.62
			C)	$5,006.28
			D)	$5,269.73
5.		In problem 4, Claire's annual salary is $25,620. What is the rate of benefits?
			A)	25%
			B)	19%
			C)	20%
			D)	22%
6.		At your pastry shop, you pay your head baker $31,980 annually. What is the baker's weekly pay?
			A)	$558
			B)	$620
			C)	$615
			D)	$617
7.		In problem 6, one of the benefits you give your employees is two weeks of paid vacation. What is the value of this benefit for your head baker?
			A)	$1,230
			B)	$1,240
			C)	$1,234
			D)	$1,116

Use the following information to answer questions 8-14. Patricia, the statistician at your biotechnology lab, earns an annual gross salary of $45,600. Your lab offers the following benefits:

• 2 weeks of vacation
• 8 holidays
• 15 days of sick leave
• 3.5% (of salary) unemployment insurance
• 6.2% Social Security
• 1.45% Medicare
• $2,000 health insurance
• $2,000 dental insurance

8.		How much do you pay for unemployment insurance for Patricia?
			A)	$1,600
			B)	$1,596
			C)	$1,472
			D)	$1,629
9.		What is Patricia's gross weekly salary?
			A)	$856.23
			B)	$890.56
			C)	$876.92
			D)	$987.65
10.		How much are Patricia's two weeks of vacation and 15 days of sick leave worth?
			A)	$4,567.22
			B)	$4,384.60
			C)	$4,987.40
			D)	$4,653.85
11.		How much are Patricia's 8 days of holidays worth?
			A)	$1,403.07
			B)	$2,300.54
			C)	$1,743.26
			D)	$1,560.81
12.		How much do you pay annually for Patricia's social security and Medicare?
			A)	$3,500
			B)	$4,201.60
			C)	$3,257.55
			D)	$3,488.40
13.		What is the total amount you pay annually for Patricia's benefits?
			A)	$14,872.07
			B)	$16,872.07
			C)	$15,748.78
			D)	$14,090.48
14.		What is the rate of benefits for Patricia?
			A)	25%
			B)	30%
			C)	33%
			D)	41%
15.		Stan's benefits add up to $9,875. His annual gross pay is $38,760. What is the rate of benefits?
			A)	25%
			B)	30%
			C)	33%
			D)	41%
16.		The receptionist at your accounting firm earns a gross annual salary of $24,500. You provide unemployment insurance for her, which costs 3.7% of her gross pay. How much do you pay for the insurance?
			A)	$850.33
			B)	$906.50
			C)	$870.60
			D)	$970.25
17.		In problem 16, you have just hired a new accountant. His annual gross pay is $42,700. You provide the same kind of unemployment insurance for him as you do for your receptionist. How much do you pay for the accountant's insurance?
			A)	$970.25
			B)	$1,579.90
			C)	$1,813.00
			D)	$1,812.31
18.		Brad earns an annual gross salary of $19,580. He receives 1 week of paid vacation and 7 paid holidays. What are these benefits worth (rounded to the nearest dollar)?
			A)	$1,035
			B)	$876
			C)	$799
			D)	$904
19.		At your toy manufacturing plant, you pay the manager $37,240 annually. How much do you pay for the manager's Social Security and Medicare, if these total to 7.65% of annual salary?
			A)	$2,567.67
			B)	$2,698.28
			C)	$2,848.86
			D)	$2,919.75
20.		In problem 19, your manager also receives 12 days of paid sick leave. How much is this worth (rounded to the nearest dollar)?
			A)	$2,105
			B)	$1,650
			C)	$1,719
			D)	$1,821
21.		In problems 19 and 20, you also offer other benefits that total $7,230.42. What is the rate of benefits?
			A)	56%
			B)	32%
			C)	43%
			D)	40%