How much is the average American employee compensated for every hour they work?

Would you believe $47.20 per hour? That's the figure reported by the U.S. Bureau of Labor Statistics for December 2024, which includes all compensation for civilian members of the nation's workforce, including benefits like vacations or retirement benefits and also the taxes paid to provide them with government-mandated benefits, like Social Security and unemployment benefits.

Altogether, we estimate the average American employee receives about 72.5% of their compensation in the form of wages and salaries plus supplemental pay for working overtime and bonuses. The remaining 27.5% of their compensation is in the form of benefits, including health insurance, retirement benefits, paid time off from work, and various government-mandated benefits.

The following chart provides an overview of the costs employers pay per hour for each of these major categories.

We could have stopped there, but since we had the BLS' underlying data for each subcomponent of these compensation categories, we created an additional chart to illustrate where each cent of the $47.20 per hour the average American receives in compensation comes from:
 

U.S. Average Hourly Cost of Employee Compensation by Type

Average Employer Cost per Hour Worked for Various Categories of Employee Compensation, All Civilian Workers, December 2024

Employer Costs for Employee Compensation of Civilian Workers, December 2024, Grouped by Compensation Category and Type

Direct Pay

Amount

Wages and salaries

$32.52

Supplemental Pay

Amount

Nonproduction Bonuses

$1.18

Overtime and Premium Pay

$0.41

Shift Differentials

$0.09

Insurance Benefits

Amount

Health

$3.54

Short-term Disability

$0.09

Long-term Disability

$0.06

Life

$0.06

Paid Leave Benefits

Amount

Vacation

$1.72

Holiday

$1.04

Sick Leave

$0.55

Personal Leave

$0.25

Employers' Portion of Legally Required Benefits

Amount

Social Security

$2.12

Medicare

$0.54

Workers' Compensation

$0.44

State Unemployment Insurance

$0.13

Federal Unemployment Insurance

$0.03

Employers' Portion of Retirement Benefits

Amount

Defined Benefit (Traditional Pensions)

$1.40

Defined Contribution (401k/403b/415 Plans)

$1.04

Total Average U.S. Civilian Employee Compensation per Hour is $47.20

Chart: Political Calculations 2025Source: U.S. Bureau of Labor Statistics, National Compensation SurveyGet the dataEmbed Download imageCreated with Datawrapper

Assuming 2,080 hours worked per year, the annual income the average worker would report on their income tax return as their base wage and salary income is $67,641, which rises to $71,136 if we count the supplemental pay category as part of their direct annual income.

But including employer-paid benefits boosts the average U.S. wage or salary earner's annual compensation to $98,176. That additional $27,040 is largely not subject to individual income taxes, which is one reason why the portion of an American employee's compensation represented by employer-paid benefits has increased over time.

Reference

U.S. Bureau of Labor Statistics, National Compensation Survey. Employer Costs for Employee Compensation: Civilian workers. [Excel spreadsheet]. December 2024.

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