The backbone of every company’s success lies in the strength of its human resources. They take over its controls, handle its operations, and either speed towards the top of the industry ladder or drive the enterprise off the cliff. While there may be a myriad of contributing factors for a company’s rise in the field, the most notable efforts can be seen through the talent and dedication of its people. This is why both the company and the government imposes benefits on their behalf to reward their hard work. This comes in the form of supplemental wages determined through a salary schedule. Read on to find out more about it.
What Is a Supplemental Salary Schedule?
A 2015 Glassdoor Employment Confidence Survey found that four in five employees would readily prefer benefits over a salary raise. These include supplemental wages such as reimbursed vacation pay, performance incentives, retirement plans, and commissions. Rusty Rueff, Glassdoor’s workplace expert, said that companies who wish to thrive in the labor market must take into consideration the granting of favorable perks to win the best talents for the job. Not only do benefits attract potential employees, but it also forges overall personnel satisfaction and loyalty.
A supplemental salary schedule is a matrix or a sheet of pay levels of the employee’s benefits. It helps identify the equivalent benefit for each position level and what criteria the employees should meet to achieve more perks. Through this, the staff can clearly see their path in the organization and what they should expect in the future.
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How to Make a Supplemental Salary Schedule
A supplemental salary schedule is an essential tool in determining what benefit is due to every employee. When not done right, it would fail to deliver its purpose. Below are some guidelines on how to make yours:
1. Weigh Positions and Responsibilities
A helpful way to start your salary schedule is to draw each personnel’s job description, assessing the weight of their responsibilities. Make an outline of their roles, expected number of working hours, and position level in the organization. Critically evaluate their roles in the company and the amount of load they’re going to render. Identify what certificates or licenses do they need to perform their job. This way, you can logically determine what perks befit their respective job titles.
2. Consider Your Capacity
Google is prominent for its over-the-top employee benefits on top of their ludicrous basic pay. This includes paid maternal and paternal leaves, death pay, onsite masseurs, and free meals by professional chefs. However, not every company has the luxury to do so. Consider what your enterprise can offer but never go beyond your means. What good will it bring if your employees are receiving perks that can potentially sink your operations?
3. Categorize Benefits
Make a list of mandated benefits along with added bonuses. Afterwards, determine and categorize its recipients. If you wish to give equal benefits regardless of the title and the position, then this would be an easier task. In most cases, though, benefits can vary from one employee from the other. Therefore, you have to establish a maximum and a minimum. Determine what benefit entry-level employees are entitled to versus those that are in the administration. Identify the growth of their grant as they move up the corporate ladder. This way, you can establish a system that shows their current status and how it’s going to increase.
4. Ensure Accuracy
A salary schedule is also a management transparency chart showing what the employees can expect in their current standing and how the company hierarchy works in terms of compensations and benefits. Rifts and conflicts are often rooted in monetary issues. Before publishing the simple schedule’s content, it should be placed under strict scrutiny to ensure that it’s correct before verification.
What are the different supplementary pays?
Below are some of the examples of what is considered a supplemental pay:
- Severance pay
- Back wages
- Retroactive pay
- Unused vacation leaves
Is supplemental pay taxable?
Yes, but it depends on your annual supplemental wage. According to the federal law, if your yearly supplemental pay exceeds $1 million, the withholding tax must be the highest income tax rate allowed (presently 39.6%). If it is below the mentioned amount, it would depend on whether or not it is paid separately from your regular wage.
What are the different pay schedules?
The following are the different schedules utilized by businesses and companies:
- Monthly (12 payrolls)
- Semi-Monthly (24 payrolls)
- Bi-Weekly (26 payrolls)
- Weekly (52 payrolls)
What is the difference between supplemental pay and regular pay?
Regular pay is the predetermined amount or rate paid to the employees on a definite schedule. On the other hand, supplemental pay differs in every payroll schedule and is not based on the amount of working time rendered.
While the word “supplemental” essentially means an addition to something, a supplemental salary is more than just a privilege. It is a right. Every laborer is entitled to access healthcare, paid leaves, and compensations for their well-being. They also deserve the merit given for exercising exemplary performance and producing high-quality outputs. It contributes to their overall workplace performance, boosting the company’s status in the process. High performing talents are those that are rewarded well.