How To Calculate Your Total Compensation Package
Guest Post from Her Designed Life
So you’ve received a job offer and you’re thinking you should take the plunge and just say yes. Besides, who likes sitting around submitting resumes all day? But before you jump in head first, let’s set the record straight. Those dollar signs might be deceiving.
Here are 5 things you need to consider when calculating your total compensation in no particular order.
For many individuals, having access to affordable healthcare can make a huge difference in employee satisfaction.
Here are some questions to ask your potential employer about healthcare options:
Do you have a breakdown of the different healthcare options for your employees?
Does your company include dental and vision benefits for employees and dependents?
What you should know about healthcare options:
Healthcare options can seem daunting when trying to determine the right fit for you and your family. Choosing the right plan will be dependent on you and your family’s medical needs.
If you are generally in a good health and visit the doctor infrequently, you might consider a High Deductible Health Plan (HDHP) which offers lower monthly deductions compared to traditional PPO’s, but has higher up-front costs until you meet your deductible.
If your potential employer offers a Health Savings account (HSA), an account used in combination with an HDHP, it may be a good sign. HSA’s are used to pay for medical expenses and funds can be invested to grow even more. Just keep in mind there are some limits to your contributions and all of the expenses must be used for medical reasons.
You can find more about healthcare plans on WebMD here.
Many employers offer competitive retirement benefits. Although there is a running debate on whether or not Social Security will be available for millennials ( see Investopedia , Business Insider, and Time), it’s a good idea to explore your options.
Questions to ask or research on your potential employer:
Do you offer any 401(k) options for your employees?
What is the employer match for your 401(k)?
Does your company offer profit sharing?
Commission and Bonuses
Many positions in sales or customer service have opportunities for commission or review bonuses. Although these types of payment can appear very lucrative, you may want to ask a few extra questions before signing on the dotted line.
Questions to ask or research your potential employer:
(For bonuses) How does your company determine an employee’s eligibility to receive a bonus?
Is there a performance scale required to meet before an employee is eligible?
(For commission) Can you give me an example of a goal that employees must hit in order to receive commission?
How are employees evaluated against this goal?
(For both bonuses and commission) How often are commissions and bonuses available during the year?
Many employers offer tuition assistance if degrees or certificates are applicable and align with a company’s goals. Besides saving you money, this can increase your income over time.
Questions to consider asking your potential employer:
What are the requirements for tuition assistance?
Do you offer tuition discounts with any local schools?
Are there tiers of reimbursement for tuition (i.e. grades determine amount received)?
Childcare or Adoption Assistance or Subsidies
Some employers are now offering childcare tuition discounts with local childcare providers or even subsidies for childcare up to a certain dollar amount. What’s even better is that some employers may also reimbursement for adoption fees or fertility clinics! Check out a few examples of the different kinds of traditional childcare benefits or subsidies here.
While these are just a few examples of benefits, this list is truly not exhaustive. And of course to fully understand your salary or hourly take home pay, you’ll need to factor in all of the above deductions plus taxes and social security to calculate your annual net income. Lost yet? No worries, here’s a helpful guide to get down with the numbers.
Above all all else, choosing a new employer has a lot of considerations outside of pay like more flexible hours, a more experienced management staff, convenient location, and upward mobility opportunities.
Just think about what Vicki Robin, author of Your Money, Your Life says,
“Money is something we choose to trade our life energy for.”
When push comes to shove, you’ve got to consider what is worth all of your time and energy.
If you liked this article, don’t forget to check out how I landed a new job without looking How to Get Recruiters to Come to You.
Melody Johnson is a Certified Finance Educator through the National Financial Education Council and Certified Finance Coach. She currently works in the Detroit Metro area developing corporate training content. For more financial tips and career development, subscribe to Melody’s personal finance blog at www.herdesignedlife.org.