Why do organizations pay a growing share of compensation in the form of benefits? It would be simpler to pay all compensation in cash and let employees buy their own insurance and contribute to their own savings plans. That arrangement would also give employees greater control over what their compensation buys. However, several forces have made benefits a significant part of compensation packages. One is that laws require employers to provide certain benefits, such as contributions to Social Security and unemployment insurance. Also, tax laws can make benefits favorable to employees. For example, employees do not pay income taxes on most benefits they receive, but they pay income taxes on cash compensation. Therefore, an employee who receives a $1,000 raise “takes home” less than the full $1,000, but an employee who receives an additional $1,000 worth of benefits receives the full benefits. Another cost advantage of paying benefits is that employers, especially large ones, often can get a better deal on insurance or other programs than employees can obtain on their own. Finally, some employers assemble creative benefits packages that set them apart in the competition for talent. For example, International Business Machines and Texas Instruments offer an online course that helps employees cope with the demands of being a caregiver for an ill family member, while Pitney Bowes and Marriott International offer insurance that pays the full cost of drugs for chronic conditions like hen suyễn và bệnh cao huyết áp.
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