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What benefits actually cost per employee

Medical dominates every benefits budget. Everything else combined is usually smaller than the gap between two medical plan designs.

Updated January 2026 ยท 8 minute read

Benefits are the largest discretionary block of employer cost and the hardest to benchmark, because published averages mix employers who cover families generously with employers who offer a thin employee only plan.

The useful way to look at it is per head and per component, with a clear statement of who is covered.

Medical

The employer share of medical premium is the single biggest line. Employee only coverage commonly costs an employer somewhere between 6,000 and 10,000 dollars a year. Family coverage with a generous employer share commonly runs 14,000 to 22,000 dollars.

Three levers move it more than anything else. First, how much of the premium the employer covers, which typically runs 70 to 100 percent for the employee and 50 to 80 percent for dependants. Second, plan design, where a high deductible plan can be 20 to 30 percent cheaper than a rich preferred provider plan. Third, the mix of employees who actually enrol in family coverage, which no benchmark can tell you in advance.

Dental and vision

Small and predictable. Dental typically costs an employer 300 to 700 dollars per head per year, vision 60 to 150 dollars. Both are cheap ways to make a package feel complete and neither will move your budget materially.

Life and disability

Basic group life at one or two times salary usually costs 100 to 300 dollars per head. Short and long term disability together typically run 250 to 700 dollars. These are priced on salary and age mix, so a senior team costs more.

Retirement match

This is the second largest line after medical and the most commonly underestimated, because employers budget the maximum match rather than the realised one. A 4 percent match on a 100,000 dollar salary is 4,000 dollars at full take up, but realised cost usually lands at 60 to 85 percent of that because not everyone contributes enough to capture the full match. Add plan administration and recordkeeping fees on top.

Everything else

  • Health savings or flexible spending account contributions, 0 to 1,500 dollars.
  • Wellness, mental health and employee assistance programmes, 100 to 500 dollars.
  • Learning and development budgets, 500 to 3,000 dollars where offered.
  • Commuter, parental leave top ups and family support, highly employer specific.

Putting it together

A lean but credible package for an employee only enrolment lands around 5,000 to 10,000 dollars per head per year. A genuinely competitive package with family medical and a real retirement match lands around 15,000 to 27,000 dollars. That is the range our true cost of an employee calculator uses, scaled by a regional index.

One planning note worth repeating. Benefits are mostly flat per head rather than proportional to salary, so they weigh far more heavily on junior roles. A 12,000 dollar benefits load is 20 percent of a 60,000 dollar salary and 6 percent of a 200,000 dollar one. That single fact explains most of the variation in employer cost multipliers.