To calculate the benefit rate, we need to determine the total value of Will’s benefits as a percentage of his salary. Let's break down each component of the benefits:
1. Health Insurance Benefit:
- Will's employer subsidizes 60% of the health insurance cost, which totals $10,000.
- So, the value of the health insurance benefit to Will is:
[tex]\[
\text{Health Insurance Benefit} = 0.60 \times 10,000 = 6,000
\][/tex]
2. FICA Benefit:
- FICA (Federal Insurance Contributions Act) tax rate is 7.65%.
- Hence, the value of the FICA benefit to Will is:
[tex]\[
\text{FICA Benefit} = 0.0765 \times 70,000 = 5,355
\][/tex]
3. Retirement Matching:
- The employer matches 6% of Will’s salary for retirement.
- So, the value of the retirement matching benefit is:
[tex]\[
\text{Retirement Matching Benefit} = 0.06 \times 70,000 = 4,200
\][/tex]
4. Paid Time Off (PTO):
- Will receives 10 days of paid vacation.
- Assuming there are 260 working days in a year, the value of the PTO benefit is calculated as:
[tex]\[
\text{PTO Benefit} = \left(\frac{70,000}{260}\right) \times 10 = 2,692.31
\][/tex]
Now, we sum up all the benefits to get the total benefit cost:
[tex]\[
\text{Total Benefit Cost} = 6,000 + 5,355 + 4,200 + 2,692.31 = 18,247.31
\][/tex]
Next, we calculate the benefit rate by dividing the total benefit cost by Will’s annual salary and then multiplying by 100 to get a percentage:
[tex]\[
\text{Benefit Rate} = \left(\frac{18,247.31}{70,000}\right) \times 100 = 26.0676 \, \%
\][/tex]
Finally, rounding to the nearest percentage point, the benefit rate is:
[tex]\[
\boxed{26 \%}
\][/tex]
Therefore, the benefit rate for Will's total employee benefits is 26%.
