Total Compensation Explained: Beyond Base Salary
March 8, 2025
When evaluating a job offer, most people look at one number: base salary. That's a mistake. Total compensation — the full value of everything the employer is offering — can differ from base salary by $20,000 or more.
What goes into total compensation?
Base salary
The guaranteed annual amount you receive regardless of performance. This is your floor.
Annual bonus
Target bonuses are usually 5–20% of base salary but are not guaranteed. Discount them to 50–70% of their face value when comparing offers, since they depend on company and individual performance.
Health insurance
Employer-sponsored health insurance is worth $6,000–$15,000 per year depending on how much the employer covers. If you currently pay out of pocket, this matters a lot.
401k matching
A 4% match on a $70,000 salary is $2,800 per year in free money. Multiply that over a career and it's significant.
PTO
To calculate the cash value of PTO: (Base salary ÷ 260 working days) × PTO days. 15 days on a $70k salary = $4,038/year. The difference between 10 days and 20 days is $2,692.
Equity
RSUs and stock options can be worth a lot — or nothing. For public companies, use the current share price. For private companies, be conservative; most startups don't reach an exit.
How to compare two offers
Build a simple spreadsheet with rows for each component. Assign a dollar value to each one. Add them up. The offer with the lower base salary might win on total comp once benefits are factored in.
Wagelit does this automatically — it calculates your total comp and shows you exactly how it compares to market.
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