Labour benefits are the additional costs, beyond basic wages, that an employer pays directly to employees or into a fund on their behalf, such as holiday pay, pension contributions and sick pay.
The term is more common in North American cost engineering; in UK practice these costs are captured when building up an all-in labour rate. They matter to the QS because the basic wage on its own understates the true cost of employing an operative. Typical items include:
- annual and public holiday pay;
- employer’s pension contributions;
- sick pay and other contractual entitlements;
- other benefits set out in the relevant working rule agreement or employment contract.
Labour benefits differ from labour burden, which covers statutory taxes and insurances such as employer’s National Insurance contributions. When checking daywork or valuing variations, confirm which of these costs are already included in the rates so they are not paid for twice.
Related terms: Labour Burden, All-in Labour Rate, Labour Rate, Daywork.
