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Employer Costs for Employee Compensation

Cash Compensation: Supplemental pay and what it includes

When observing overall employee compensation, it is important to consider not just the costs of wages and salaries but also the costs of providing various benefits. Aside from wage data, the Employer Costs for Employee Compensation (ECEC) provides detailed benefits cost data for a more comprehensive look at overall compensation. The ECEC provides the employer cost of a specific benefit as well as the percent of total compensation that the benefit represents. 

Measuring the costs of supplemental pay

The most important criteria for many prospective job seekers consider when looking for work is overall compensation. Wage data is likely the first thing that most people consider when observing overall compensation. While wages and salaries are the largest component of compensation, supplemental pay is an important component of overall cash compensation.

Although it makes up a relatively small part of compensation for the civilian work force, supplemental pay is still worth examining because it is the only benefit that the employee receives as a direct cash payment, essentially making it a part of cash earnings from the worker’s perspective. Of the five benefit groups for which the ECEC provides data, supplemental pay accounted for 3.1 percent among civilian workers in September 2022. (See chart 1.)

Chart 1 data table
Table 1. ECEC benefits percentage of total compensation, Civilian workers, September 2022
Benefit Type Percentage



Paid leave


Legally required benefits


Retirement and savings


Supplemental pay


Source: U.S. Bureau of Labor Statistics, National Compensation Survey

Supplemental pay is broken down into three categories within ECEC data:

Shift differentials- extra payment for working a schedule that varies from the norm within a regular work schedule, such as night or weekend work

Overtime and premium pay- pay at a higher rate for overtime(1), holiday, or weekend work

Nonproduction bonuses- bonuses not directly tied to production (such as end-of-year and profit-sharing bonuses(2))

Among supplemental pay components, nonproduction bonuses accounted for 2.1 percent and cost employers $0.87 per hour worked in September 2022. Overtime and premium pay made up 0.8 percent of total compensation and cost $0.36 per hour worked while shift differentials made up 0.2 percent of total compensation and cost $0.07 dollars per hour to provide. (See chart 2.)

Chart 2 data table
Table 2. Supplemental pay percent of total compensation breakdown, civilian workers, September 2022
Benefit type Percentage

Supplemental Pay


Nonproduction bonuses


Overtime and premium pay


Shift differentials


Source: U.S. Bureau of Labor Statistics, National Compensation Survey

Breakdown by industry

Separate estimates for overtime, bonuses, and shift differentials are published for management and professional occupations, sales and office workers, service occupations and similar broad occupational groups. Estimates for supplemental pay, i.e., the sum of overtime, bonuses, and shift differentials, are also available for a selection of more detailed occupations, including professional and related occupations, teachers, nurses, sales and related occupations, and office and administrative support occupations, but the components of supplemental pay (overtime, bonuses, and shift differentials) are not published at this level of detail.

Since supplemental pay is considered a direct cash payment and is not included within wages and salaries, it makes sense to observe it as a percentage of cash compensation(3), emphasizing the fact that supplemental pay is more closely related to wages and salaries than most other benefits. Among private industry occupations, supplemental pay as a percent of cash compensation ranged from 2.7 percent among service occupations to 7.1 percent among production occupations in September 2022. (See chart 3.)

Chart 3 data table
Table 3. Supplemental pay as a percent of cash compensation among occupations, private workers, September 2022
Occupational group Percentage of cash compensation



Management, business, and financial


Production, transportation, and material moving


Construction, and extraction, farming, fishing, and forestry


Management, professional and related


Natural resources, construction, and maintenance


Transportation and material moving


Installation, maintenance, and repair


Professional and related


Office and administrative support


Sales and office


Sales and related




Source: U.S. Bureau of Labor Statistics, National Compensation Survey

Accessing the data

To assist users in evaluating the reliability of these compensation costs, relative standard errors are also published for each estimate. The standard error for the series is divided by the cost estimate and expressed as a percent of the compensation cost.

ECEC data involving supplemental pay benefits, are available for private industry workers, civilian workers, and state and local government workers from 2004 to the present and will be produced for the March, June, September, and December reference periods. ECEC data is available through the public database, as well as in Excel form. The cost of benefits is impacted by worker participation and users can obtain information on incidence and provisions of employer-sponsored benefits in the U.S. through the annual benefits publication, also produced by the National Compensation Survey program.


(1) Premium pay associated with overtime is for time worked beyond the regular work schedule.

(2) Production bonuses are payments based on production in excess of a quota or on completion of a job in less than standard time and are directly included in wages.

(3)Cash compensation includes the sum of wages and salaries and supplemental pay.