Total compensation includes your base salary, but it also includes the value of benefits such as health insurance, PTO, retirement options and more.
Compensation is about much more than take-home pay. Simply put, your total or annual compensation encompasses the monetary amount of your salary and all the other benefits your employer offers that have financial value, such as health insurance, paid sick leave and vacations.
While your compensation is displayed on a W2 as gross annual income, it is different from your salary because it also includes all of the other benefits you receive from your employer. With few exceptions, almost all forms of compensation are taxable by the IRS.
While compensation packages can vary across industries and companies, the benefits you receive largely depend on your employer and your role. As a woman, you may also want to check out some key benefits that could add value to your total compensation package.
Here, we've covered the general forms of compensation that you will encounter throughout your career, as well as some female-specific benefits that you should explore if you are considering a new job offer:
What is included in my compensation?
Your salary is the amount of pay that you receive for your work. Unlike those who are paid an hourly wage, salaried employees receive a fixed amount of money, typically on an annual basis. The amount is displayed in terms of gross income, which is prior to taxes having been withheld.
The most commonly known forms of company benefits include insurances such as medical, disability and life, but there are generally many other perks you receive when working for a company. These might include everything from gym memberships and child care assistance to cash or stock bonuses.
Benefits are typically categorized as either employer-paid or voluntary. Employer-paid benefits typically include health insurance and offering a 401(k) or other qualified retirement plans. Voluntary benefits might include short-term loans, a variety of pay-as-you-go insurance products, such as pet insurance, or student loan refinancing.
Employer- or corporate-paid compensation will also often include expenses that the company has covered for you, such as relocation fees and tuition assistance.
There are also other benefits you may want to consider as a woman. For example, you may want to ask whether your company offers:
- Parental/maternity leave, including leave for women who choose adoption
- Insurance or flex spending accounts that cover birth control and other female-specific needs, such as menstrual products
- Insurance for a domestic partner, if you are not married
- Plans that set aside pre-tax dollars for day care and adult day care
- Coverage for procedures such as egg freezing and IVF, if you are decide to postpone parenthood or have trouble conceiving
3. Paid time off (PTO)
The number of days of paid time off that you receive depends on your employer, but it is generally determined based on your position and your years of service at the company. The PTO you receive in a year may increase the longer you work at the company, and could be a valuable point of negotiation, should the company be unable to meet your salary needs when you are considering a role or increase your pay during your tenure.
4. Corporate contributions
Corporate contributions generally describe the amount of money that your employer invests into your retirement plan. When you contribute part of your salary to your 401(k), for example, your employer may match that amount. Some employers will just add a certain amount to your 401(k) without you contributing anything, and increasingly, some employers may offer you the opportunity to elect to pay down your student debt with your corporate contribution, rather than contributing to your 401(k).
When accepting a job offer, make sure you are clear on how long you must work for a company before you are vested in your 401(k) and can walk away with the employer's matched funds. Every company has a different policy but, on average, you must be employed by a company for three to five years before you own all of your employer's matched contributions.