Wholesale retailer Costco is famous for its unique approach to finding uncommon cost-cutting measures and passing on the savings to its customers. But does the conscious-capitalist warehouse giant extend this same generosity to its staff?
A closer look at Costco employee benefits, both reported by the company itself and by current and former employees, reveals an overall compensation package that’s tough for competitors to beat.
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Costco Benefits for Employees
It’s important to note while Costco generally takes excellent care of its workers, many of the benefits below may vary slightly by state. The years an employee has been with the company and whether they work part-time or full-time hours also significantly impact many of these benefits.
Regardless of one’s specific employment situation with the wholesale club, Costco is a company that goes to considerable lengths to look after its employees’ physical, mental, and financial well-being.
The company also makes many great benefits available to its in-store employees that other retailers often reserve for only their salaried corporate staff
1. Free Annual Memberships
One of the first things prospective Costco employees want to know is whether employees get a free Costco membership. And the answer is no, not exactly – they get four.
In addition to a free annual membership for themselves, Costco employees can also offer three others to whomever they choose, including friends, family, or anyone else.
This benefit saves you and three of your favorite frugal shoppers the chance to save big on the annual cost of being a Costco member, not to mention the additional savings of shopping the wholesale club’s many impressive discounts on everyday goods.
2. Health Benefits
Costco makes health benefits available to most employees working beyond part-time. Anyone working more than 24 hours per week at the company can enroll in health benefits anytime after completing their first 180 days.
The program includes health, vision, and dental insurance options and access to great rates at Costco’s in-store pharmacy. Individuals over 50 who retire from the company after working there for at least five years may also be eligible for the company’s retiree health plan.
3. Mental Healthcare
Costco cares about its employees’ mental health and invests in that goal. In addition to the ordinary behavioral health costs covered under the company’s health insurance, it offers extra mental health resources to employees struggling with life changes or other difficulties.
One of these resources is an Employee Assistance Plan or EAP. The EAP covers up to six counseling sessions annually for anyone seeking support during a significant work or life change event.
4. Great Hourly Rates
Costco offers a $17 per hour minimum wage across the board, well above the federal minimum wage of $7.25, with employee pay only rising from there.
New employees working in the Service Assistant role can earn at least $17 per hour, which increases to $18 per hour for Service Clerks. Specialized positions in the store, such as pharmacy, optical, and meat-cutting employees, have the potential to earn even higher rates.
5. Additional Insurance Options
Basic health and dental aren’t the only insurance benefits available to Costco staff. Most employees can claim a basic life insurance benefit, with an amount that increases based on monthly hours and the number of years of service with the company.
Workers also generally have access to basic disability insurance and accidental death and dismemberment (AD&D) insurance, with the option to increase the amounts through payroll deductions.
While these forms of coverage may not be the flashiest job benefit, they can protect your family from severe financial harm during difficult times. When you’re already dealing with a tragedy on this scale, massive financial risk is the last thing you want to worry about.
Fortunately, with this array of insurance backing, you won’t have to.
6. Saving for Retirement
The benefits of a long-term job should help you cover your day-to-day expenses and plan for your future. Costco’s compensation package does this in a few ways, perhaps most notably through its 401(k) offering.
Employees can contribute a pre-tax portion of their paycheck to the plan every month, and Costco will match those contributions at 50%, up to a maximum of $500 per year.
The tax advantages, generous matching, and passive nature of this plan give workers ample opportunity to coast toward future financial security while working at Costco.
7. Commuter Benefits
Speaking of tax benefits, Costco offers employees a way to save on their commute to work through a unique tax-advantaged program. With the program, workers can deduct many transport-related expenses, including parking, public transit, and vanpool costs, from their taxes.
Although the company does not reimburse these expenses directly, this benefit still offers a great way to reduce the overall costs of your spending to get to and from work. Daily transport expenses can quickly add up, and so can the savings from deducting them!
8. Turkey Time
One of the more peculiar benefits of working at Costco comes to employees during the holiday season each year. No, it’s not year-end bonuses (more on those later) – it’s a turkey.
Per Business Insider, the wholesale club offers all its employees a free turkey to take home during the holiday season each year. Those not celebrating Thanksgiving or simply not interested in turkey can choose generosity instead and have the company donate a turkey on their behalf.
9. Plenty of PTO Options
Costco offers its employees several accommodations for paid time off (PTO). In addition to at least seven paid holidays each year, workers can start accruing vacation days after their first year with the company.
After crossing that threshold, employees working over 2,000 hours per year will get one week of vacation days per year. This amount then increases with continuous years of service.
Several other types of PTO are also available to staff under different circumstances, including sick days, maternity leave, and jury time. Part-time hourly employees will still have some access to these PTO benefits but on a limited basis.
10. Equity-Based Compensation
The 401(k) plan isn’t the only way for Costco employees to build wealth through privileged investing and residual income opportunities. Some eligible employees can also earn compensation through company stock in various forms.
Costco utilizes multiple forms of stock-based remuneration, including stock options and incentive plans. It also offers an Employee Stock Purchase Plan, or ESPP, which provides employees favorable conditions to buy Costco stock using deductions from their regular paychecks.
11. Extra Pay on Sundays
Working on Sundays means time and a half pay when you work for Costco. That means even staff earning the company’s minimum wage of $17 can make $25 an hour on Sundays.
This simple benefit can be highly lucrative for any employee ready and able to put in regular weekend hours and give themselves a significant raise.
12. Does Costco Offer Employee Discounts?
Sadly, one benefit Costco does not offer is an employee discount. However, employees do get some benefits as Costco shoppers.
In addition to the annual memberships and free turkeys mentioned above, employees at many Costco clubs can shop their store after hours – meaning less fuss, saving time, and access to the best deals in the store!
13. Bonuses for All
Hefty bonuses aren’t just reserved for the high-up executives at Costco. Instead, almost everyone working for the retailer is eligible for either annual or semi-annual bonus pay.
According to a Payscale survey, Costco employees earn an average of over $4,000 in annual bonuses. Cashiers reported bonuses averaging around $2,000 annually, while more specialized staff, such as those in the pharmacy and optical departments, could earn up to $7,000 annually!
14. Upward Mobility
Ambitious and driven people considering employment at any company will likely have one burning issue on their minds: upward mobility. Does someone in an entry-level position have opportunities with the company to move up into higher-paying specialties, management, and beyond?
At Costco, the answer is a resounding yes. Employees have many opportunities to learn and move up to higher positions while expanding their value to the company. Regarding the warehouse, 70% of the company’s managers started as in-house hourly employees.
Taking Advantage of Costco’s Fantastic Benefits
Costco is a company and a brand famous for putting customers’ needs ahead of profits, with abundant ways for shoppers to save on everyday essentials. Fortunately for those seeking employment with the retail giant, this philosophy also appears to extend to Costco’s employees.
Every person who works for Costco, from the front-of-store to the warehouse to the corporate office, has ample opportunities to support themselves and build a future working for the company. From baseline pay and health coverage to investment opportunities, shopping perks, and more, this company treats employees as genuine members of its team.
For financial security, growth opportunities, and resources to support you in other parts of your life, Costco’s benefits are tough to beat.
This article originally appeared on Wealth of Geeks.
About the Author: Sam is the creator of the personal development blog Smarter and Harder. His mission is to start exciting new conversations that empower people to improve their work, lives, and money, and have fun doing it. In all things, he strives to lead with positivity, understanding, and more than a bit of enthusiasm.
I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.
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