With the unemployment rate hovering near record lows, and the Great Resignation continuing at the highest rate ever, attracting and retaining good employees is one of your top concerns. In response, most practices have implemented substantial pay increases to attract new hires and retain existing employees.

Unfortunately, higher pay may still not be enough to maintain your employees’ purchasing power, especially with inflation raging at an annual rate of over 8%. Worse yet, those pay increases are fully taxable, and may push employees into even higher tax brackets. In many cases, your employees may end up with only 65% of each dollar of pay increase in after-tax disposable income, as shown below.

A Better Way

Fortunately, there’s a much better approach. Through giving more, or all, of employee pay increases in the form of fringe benefits, rather than taxable