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How do I calculate benefits and premiums for short-term disability?

STD benefits and premium amounts depend on the weekly salary.

  • Benefits are usually up to a fixed maximum set by the plan, for example: 60% of weekly salary, to a maximum benefit of $1500.
  • Salary amounts are rounded according to the carrier's rules, e.g., 52,500 rounded to 52,000.
  • Premiums are calculated in two ways, depending on the carrier:
    • Benefit amount / (10 * Rate)
    • Weekly salary / (10 * Rate)
  • Benefits are treated as post-tax by default, but there may be situations where administrators ask their workers if they prefer pre-tax disability benefits. 
  • The volume in Zenefits is based on the amount of benefits an enrollee will receive, however, the carrier may reflect the full monthly/weekly salary instead of the amount the worker will receive.

Example

Bob earns $52,500 annually. His carrier rounds down to the nearest thousand ($52,000), so his weekly salary (for the purposes of calculation) is $ 1 ,000.

  • His plan design is 60% of weekly earnings, up to a $1500 weekly max benefit.
  • His rate is .225/10.

According to the plan design:

  • His weekly benefit amount is (.60 x $1000) = $600.
  • His monthly premium is ($600 x .225 / 10) = $13.50.

Remember that even if the weekly salary exceeds the maximum weekly benefit, their benefits and premium are capped by the maximum benefit. For example, if Bob earned $5000 weekly, but kept the same plan outlined above:

  • His weekly benefit is capped at $1500 (the plan's max benefit is $1500).
  • His premium is capped at $33.75 ($1500 x .225 / 10).
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