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Compensation Percentiles: A tool for assessing employee compensation

Compensation percentiles are based on the National Compensation Survey (NCS) program’s Employer Costs for Employee Compensation (ECEC) to identify compensation ranges. Compensation percentiles provide another NCS tool to assess employee compensation.

Evaluating compensation costs by examining wages and salaries only, excludes a significant portion of employers’ costs for employee compensation per hour worked. On average, wages and salaries account for approximately 70 percent of total compensation while benefit costs account for the remaining 30 percent of these costs, see table A.

 

Table A. Relative importance of employer costs for employee compensation, March 2019
Compensation component Civilian workers (1) Private industry workers State and local government workers

Wages and salaries

68.6% 70.1% 62.4%

Benefits

31.4 29.9 37.6

Paid leave

7.2 7.2 7.5

Supplemental pay

2.8 3.2 1.0

Insurance

8.7 8.0 11.9

Health

8.3 7.5 11.6

Retirement and savings

5.4 3.9 11.8

Legally required benefits

7.3 7.7 5.5

Footnotes:
(1) Includes workers in the private nonfarm economy except those in private households, and workers in the public sector, except the federal government.

Source: U.S. Bureau of Labor Statistics, National Compensation Survey, Employer Costs for Employee Compensation

The compensation percentile data are constructed using wages and salaries to determine the 10th, 50th (median), and 90th percentile bands and the average benefit costs for observations included in those percentile wage bands. The compensation costs for each of the percentile bands are available separately for private industry workers as well as state and local government workers. Compensation costs are also available for civilian workers, which is the combination of the two aforementioned groups of workers. Chart 1 demonstrates the wages and salaries for each worker group by the three wage percentile bands.

Chart 1: Employer costs for wages and salaries by ownership, March 2019

 

Chart 1. data table

 

Table 1. Employer costs for wages and salaries and total benefits by ownership, March 2019
Wages and salaries Total benefits
Ownership 10th percentile 50th percentile (median) Average 90th percentile 10th percentile 50th percentile (median) Average 90th percentile

Civilian workers

$10.28 $18.73 $25.22 $48.42 $2.43 $9.14 $11.55 $24.20

Private industry workers

10.06 17.64 24.17 46.64 2.31 7.57 10.33 21.96

State and local government workers

13.32 28.42 31.75 54.84 8.17 19.57 19.14 30.57

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

 

Total compensation includes employer costs for wages and salaries and benefits. Total benefit costs are derived from employer costs for paid leave, supplemental pay, insurance (including health care), retirement and savings, and legally required benefits. Chart 2 provides the March 2019 compensation costs for civilian workers for each of the wage percentile bands. For additional information on compensation components, see the National Compensation Measures in the BLS Handbook of Methods.

Chart 2: Compensation costs for civilian workers by wage percentile, March 2019

 

Chart 2. data table

 

Table 2. Compensation costs for civilian workers by wage percentile, March 2019
Compensation component 10th percentile 50th percentile (median) 90th percentile

Total compensation

$12.71 $27.87 $72.62

Wages and salaries

10.28 18.73 48.42

Total benefits

2.43 9.14 24.20

Paid leave

0.30 1.76 5.88

Supplemental pay

0.17 0.84 1.95

Insurance

0.59 3.18 6.14

Health insurance

0.57 3.06 5.80

Retirement and savings

0.11 1.11 5.49

Legally required benefits

1.27 2.27 4.75

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

 

Compensation percentiles are provided in current dollar (nominal) and constant dollar (real) to facilitate assessment of compensation costs. Constant dollar estimates are produced by taking the current dollar (nominal) compensation costs and adjusting them by the Consumer Price Index (CPI) in order to produce real or price-adjusted estimates. Constant dollar estimates remove the effect of changes in consumer prices, such that compensation estimates are comparable on a same-dollar basis. The CPI for All Urban Consumers (CPI-U) U.S. City Average All Items (series id CUUR0000SA0) is used for to adjust prior years’ costs to current dollar costs (March 2019). Each year the constant dollar (real) estimates will be updated to reflect the most recent reference period. The current dollar estimates are based on the costs associated with the reference period and no adjustment for consumer prices are applied. Chart 3 provides the total compensation costs from March 2009 to March 2019 in both current and constant dollar terms.

Chart 3. Total compensation costs for civilian workers at 50th percentile (median), March 2009
to March 2019

 

Chart 3. data table

 

Table 3. Total compensation costs for civilian workers by wage percentile, March 2009 to March 2019
Year 10th percentile 50th percentile (median) 90th percentile
Current dollar (nominal) Constant dollar (real) Current dollar (nominal) Constant dollar (real) Current dollar (nominal) Constant dollar (real)

2009

$10.12 $12.09 $22.97 $27.46 $56.05 $66.99

2010

10.10 11.80 23.29 27.21 56.74 66.29

2011

10.24 11.65 23.34 26.55 58.48 66.51

2012

10.32 11.44 23.97 26.56 59.80 66.26

2013

10.42 11.38 24.31 26.54 60.85 66.44

2014

10.67 11.48 24.76 26.64 62.92 67.68

2015

11.01 11.85 25.76 27.74 65.17 70.16

2016

11.42 12.19 25.94 27.69 66.30 70.78

2017

11.92 12.43 26.63 27.77 69.08 72.03

2018

12.28 12.51 27.66 28.17 70.69 71.99

2019

12.71 12.71 27.87 27.87 72.62 72.62

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

 

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.

Compensation percentiles are available from March 2009 to March 2019, and will be produced annually for the March reference period. 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 NCS program. For prior research on the use of benefits to assess employee compensation by wage percentiles, see Compensation inequality: evidence from the National Compensation Survey.

The complete set of estimates and relative standard errors are available in Excel.

 

Last Modified Date: July 30, 2019