Total Compensation Statements Bring Benefits into Focus

In Summary

• A total compensation statement is a personalized report that provides the complete dollar value of an employee’s pay and benefits, moving beyond the base salary to include items like health insurance, paid time off, and employer retirement contributions, which typically account for about 30% of total employer cost.
• The statement is particularly effective at demonstrating the substantial long-term value of employer retirement contributions (e.g., company match), which are often invisible in regular paychecks, thus encouraging greater employee plan participation and saving.
• Total compensation statements serve as a communication tool to boost employee awareness of benefit costs, support retention by showcasing the full value of the compensation package, and enhance recruitment efforts with a clearer, more competitive offer.
• For effective implementation, employers should aim for a simple, one-page layout with clear visuals (like a pie chart), deliver the statement during key events like open enrollment or performance reviews, and customize the content to ensure it is relevant to each individual employee.

Employees often look first at their paycheck when they think about compensation. That makes sense, since salary and take-home pay are the numbers they see most often. Other parts of the package such as health insurance, paid time off, and employer contributions to retirement plans may not be as visible. Yet these benefits represent a large share of what employers provide. Recent reports show that wages and salaries account for about 70% of employer costs for private industry workers, while benefits make up the remaining 30%.

A total compensation statement helps employees see this full picture. It brings together salary, benefits, and retirement contributions in one report. The statement shows the value of each component in dollars so that employees can understand what they receive. For employers, it is a simple way to communicate value, improve benefit engagement, and support retention. To help clients, prospects, and others, Wilson Lewis has summarized the key details below.

What’s a Total Compensation Statement?

A total compensation statement is a personalized report that shows the complete value of an employee’s pay and benefits. In other words, it looks beyond the paycheck. While a pay stub lists wages and deductions, a total compensation statement captures the full scope of what the employer provides to workers.

Typical components include:

• Base salary and bonuses
• Employer retirement plan contributions, including the company match
• Health, dental, and vision insurance
• Life and disability insurance
• Paid time off (vacation/sick days)
• Other offerings such as tuition assistance, wellness programs, or professional development

Employers often present this information with a simple visual. A pie chart, for example, can illustrate the share of wages and benefits as portions of the whole. These visuals make the information easier to understand and highlight the value of the entire package.

Spotlight on Retirement

Retirement contributions are one of the most important parts of compensation, yet they are also one of the least visible. They do not appear in take-home pay and may go unnoticed if not highlighted in some way, especially for younger employees who may not be thinking of saving for retirement. 

Here, employers can show the match formula, the employee’s current deferral rate, and the dollar amount of the employer contribution. A bar chart that places employee deferrals next to the employer match helps demonstrate the value of each type of contribution. For example, an employee who earns $70,000 and defers 5% contributes $3,500. If the employer match is also 5%, another $3,500 may be added. That creates $7,000 in total contributions for the year. Over a decade, that adds up to $70,000 before investment growth or salary adjustments. 

By presenting the numbers this way, employees can see that the match is not a minor add-on but a large part of overall compensation. It also provides employers with a way to highlight long-term value and encourage greater participation in the plan.

Key Benefits for Employers

Total compensation statements give employers a tool to communicate the full value of what is offered through employment with the company. Key benefits include:

• Awareness — Many employees underestimate what benefits cost until they see the figures. A statement that puts a price on insurance, time off, and retirement savings helps increase employee awareness. 
• Retention — When employees see the salary and benefits together as a total dollar figure, it puts compensation into perspective. They may be less likely to leave the current position for one that only offers a higher paycheck.
• Recruitment — That same visibility can help with recruiting. Salary is usually one of the first questions, but that’s not the total picture. Showing health coverage, retirement contributions, and paid time off in dollar terms helps an organization present a more competitive offer.
• Consistency — HR teams often answer many questions about benefit costs during the open enrollment period or during performance reviews. A compensation statement gives them a consistent tool to answer those questions. This saves time and ensures every employee receives the same message.
• Long-term value — Benefits are often invisible day-to-day. But by putting employer contributions next to salary, it elevates the organization’s role in helping employees prepare for the future. 
• Tips for Implementation — Employers that are introducing total compensation statements, or refining ones already in use, can keep a few practical steps in mind.
• Choose the right time — Open enrollment and annual performance reviews are common points in the year because employees are already focused on pay and benefits. Connecting the statement to those events makes it more likely that people will read and understand it.
• Keep the layout simple — Most employers include a table with labeled categories and dollar amounts, with the total compensation figure highlighted in some way. A one-page format is usually best, with a short FAQ or glossary available for anyone who wants more detail.
• Decide how to deliver it — Paper statements can feel more personal, while online portals or secure emails may be easier to update. The choice depends on the workforce and the privacy concerns of the organization.
• Customize as needed — Employees are more likely to value the statement when it includes only relevant information. For example, if a certain benefit is not available to an individual, it should not be listed. 

Some employers also include a section for optional benefits or resources employees haven’t signed up for, including retirement benefits, life insurance, and short-term disability. This can prompt greater participation in underused programs.

Contact Us

Total compensation statements are more than a summary of pay and benefits. They are a communication tool that helps employees understand the value of retirement contributions and can be useful in driving plan participation. This is especially useful for increasing retirement savings.  If you have questions about the information outlined above or need assistance with your next retirement plan audit, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.