Compensation package
A compensation package combines the pay, incentives and benefits offered for a job.
A package can include base salary, a performance bonus, commission, equity, retirement contributions and insurance. These components have different conditions and payment dates. Break the offer into amounts you are contractually due, amounts dependent on results and benefits you receive in another form. An employer's total cost is also different from the money paid into your bank account.
Country-specific rules and the written terms affect what you receive. In Great Britain, Acas distinguishes contractual bonuses, payable when agreed criteria are met, from discretionary bonuses, which are not guaranteed. Ask the employer to explain the assumptions behind any advertised package value. A one-off joining payment, an annual salary and a share award earned over several years need separate treatment when you compare two offers for the same period.
Example
A package lists €60,000 base salary, a €6,000 target bonus and retirement contributions. You compare the fixed salary first, then examine the bonus conditions and the separate retirement benefit.
What to check
- Which amounts are fixed, conditional, one-off or spread over several years?
- What performance, eligibility or repayment conditions apply?
- Does the headline value include employer costs or benefits you cannot take as cash?