Question

Which of the following companies offers the greatest total employment compensation?
Company A
Gross pay $38,200
Insurance $3,500
Paid time off $4,100
Company B
Gross pay $39,000
20% of gross pay in total employee benefits
Job expenses $700
Company C
Gross pay $39,900
Insurance $3,200
Paid time off $3,900
Job expenses $1,000
Company D
Gross pay $39,400
18% of gross pay in total employee benefits

a.
Company A
b.
Company B
c.
Company C
d.
Company D

Answer 1

Compute total compensation = gross pay + benefits (insurance, paid time off, job expenses, or percent benefits).

Company A: 38,200 + 3,500 + 4,100 = 45,800
Company B: 39,000 + 0.20(39,000) + 700 = 39,000 + 7,800 + 700 = 47,500
Company C: 39,900 + 3,200 + 3,900 + 1,000 = 48,000
Company D: 39,400 + 0.18(39,400) = 39,400 + 7,092 = 46,492

Greatest total compensation: Company C (answer c).