Labor & Employment Law Daily Wrap Up, ECONOMIC NEWS—Employer compensation costs climb to $49.32 per hour, benefits remain significant share of labor expenses, (Aug 3, 2026)

By WK Editorial Staff

Beyond wages, employers are spending heavily on benefits.

U.S. employers spent an average of $49.32 per hour worked on employee compensation in March 2026, with wages and salaries accounting for the largest share of labor costs and benefits representing nearly one-third of total compensation, according to data released by the U.S. Bureau of Labor Statistics (BLS).

The latest Employer Costs for Employee Compensation (ECEC) report shows that workers received an average of $33.72 per hour in wages and salaries, while employers spent an additional $15.60 per hour on benefits, including health insurance, retirement programs, paid leave, and legally required benefits such as Social Security and Medicare contributions.

The March 2026 data cover civilian workers, private industry employees, and state and local government workers.

Private employment. Private industry employers reported average compensation costs of $46.60 per hour worked. Of the private-sector total, $32.60 per hour went toward wages and salaries, while $14.01 per hour was spent on benefits. Benefits represented 30.1 percent of total compensation costs for private employers.

Among benefit categories, paid leave cost private employers $3.54 per hour, insurance benefits cost $3.62 per hour, retirement and savings programs accounted for $1.57 per hour, and legally required benefits totaled $3.38 per hour worked. Health insurance alone represented $3.41 per hour.

Government workers. State and local government employers posted significantly higher compensation costs than private employers. Total compensation averaged $66.41 per hour worked, including $40.82 in wages and salaries and $25.59 in benefits. Benefits represented 38.5 percent of total compensation.

One of the most notable differences was retirement spending. State and local governments spent $8.83 per hour on retirement and savings benefits, compared with $1.57 per hour in private industry. Government employers also spent considerably more on health insurance benefits, averaging $7.52 per hour worked.

The report also highlights substantial differences in compensation costs among private-sector workers at different points in the wage distribution. Employers spent an average of $18.06 per hour for workers in the 10th wage percentile, $34.78 at the median, and $89.70 for workers in the 90th wage percentile.

Health insurance remained one of the largest individual benefit costs. Employers spent an average of $3.98 per hour worked on health coverage. Paid leave benefits represented another meaningful portion of employer spending, averaging $3.72 per hour.

The Employer Costs for Employee Compensation report is part of the BLS National Compensation Survey and measures the average employer cost of wages, salaries, and benefits per employee hour worked.

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