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Understanding salary and benefits

Understanding salary and benefits

Civilian pay and benefits packages vary greatly. Learn what may be included.

A compensation package includes multiple categories. Each of these should be evaluated for its worth to you and your family.

It's helpful to know the range of options that may exist, although the items that are available vary greatly depending on the employer, and on the sector - such as government or non-profit employers vs. small or large businesses. Some items from this list may not be available at the company you are considering, or they may not be negotiable. Salary ranges are often more definite, while benefits may be more negotiable.

Here are items that may be included in a compensation package:


The primary means of compensation in most jobs is earnings. When conducting salary research, remember to look at industry, location, and individual requirements. Use Salary Finder to find typical pay ranges for your specific occupation and local area.

  • Industry. Pay for the same occupation may vary significantly in different industries. For example, an accountant may be paid less for a job at a university than at a finance firm, although the work environment may be more appealing on campus.
  • Location. Cost of living and the availability of the skill sets needed for a position influence salary levels. For example, to afford a similar standard of living, a job offer in San Francisco, CA should be considerably higher than one for Augusta, GA even for a very similar job.
  • Organization/Individual. Your role in the organization as well as your skills, experience, and education level can impact the salary you may be offered.


Here is a list of some of the most common benefits. As you evaluate a compensation package, keep in mind that every benefit has a dollar value.

Medical insurance

Many employers offer some type of health insurance coverage, a very valuable benefit. Plans vary tremendously, so be sure to read the terms of health coverage offered.

For full-time employees, employers may cover all or a percentage of health insurance premiums. They may pay a percentage of dependent coverage, or offer a discounted rate to dependents. Insurance companies often negotiate reduced costs for services. Some employers do not offer health insurance at all.

Dental insurance

If health insurance is available, some employers also offer some type of dental insurance. Dental insurance packages often offer preventive care at little to no cost. For dental work beyond that, the employee assumes responsibility for part or all costs.

Vision insurance

Similar in nature to dental insurance, vision insurance often offers preventive care at little to no cost, as well as some coverage for glasses and contacts.

Paid time off (PTO)

PTO is as a pool of paid time off that an employee may earn over time, and use at his or her discretion. Some employers offer this time off as a bank of days, while others may offer vacation and sick leave as separate benefits.

Tuition assistance

Many employers offer compensation for workers to invest in job-related education. It may vary from a few hundred dollars to paying for workers to complete a college or graduate degree; many include conditions. Some companies require workers to be in the job for a period of time to earn the education benefit, or commit to remaining with the company a certain time, otherwise requiring that they repay tuition and costs.

401(K) or retirement contributions

Most employers value workers who contribute to their organization over time. As an incentive, they offer contributions to retirement plans. The amount employers contribute varies greatly, from 1 - 4% or more. Generally, those contributions are not immediately available to the individual.

Instead, availability is based on a “vesting” schedule tied to a defined number of years or months of service to the employer. Once the worker is vested, those contributions transfer ownership to the individual.

Stock or equity

Some companies offer individual workers an opportunity for ownership in the organization. This ownership may take the form of stocks or, especially in small businesses in "startup" mode, a percentage of ownership in the company. Often any stock or equity opportunity typically carries a caveat that outlines a “vesting” period.

Profit sharing

Some companies set aside a predetermined percentage of profits for distribution to employees who qualify. Terms of qualification varies from employer to employer.

Transportation allowance

Some employers subsidize employees' transportation expenses. This compensation can take the form of:

  • A monthly car allowance.
  • A vehicle leased for the individual by the employer.
  • Contributions for public transportation, parking and/or other fees associated with travel or commute to work.

Additional benefits may include:

  • Signing bonus, annual incentive
  • Guaranteed minimum annual incentive, discounted stock options
  • Restricted stock
  • Loan to purchase restricted stock, loan to pay taxes
  • Loan to purchase home, forgiveness of loan(s), supplemental executive medical insurance
  • Supplemental executive life insurance, supplemental executive retirement plan (SERP - funded or non-funded), non-qualified deferred compensation plan
  • Club memberships, business/first class air travel
  • Financial/tax/estate planning services, legal planning services
  • College tuition for family
  • Tax gross-ups for taxable benefits, golden parachute provisions, termination provisions
  • Housing assistance, telecommuting/flexible work schedules
  • Time of review/salary increase, employee discounts
  • Expense accounts, relocation/moving expenses
  • Professional association membership/certifications
  • Access to gym/workout facilities