What total amount should be deducted per paycheck

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Question - Suppose you are the human resource manager for a cellular phone company with 600 employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center.

The life insurance is estimated to cost $520 per employee per quarter. The legal plan will cost $416 semi-annually per employee. The company will contribute 40% to the life insurance premium and 75% to the cost of the legal services plan. The employees will pay the balance through payroll deductions from their biweekly paychecks. In addition, they will be charged 14% of their gross earnings per paycheck for maintaining the wellness center. The company will pay the initial cost of $800,000 to build the center. This expense will be spread over 5 years.

Required -

(a) What total amount should be deducted per paycheck for these new fringe benefits for an employee earning $62,400 per year?

(b) What is the total annual cost of the new fringe benefits to the company?

Reference no: EM132817479

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