Assessing a Job Offer: Compensation & Employee Benefits vs. Just Salary
Guest Post Written by Madison Ford
Salary vs. Compensation
Salary is the money an employer pays you for your job. If you assess a job offer based solely on salary, you may miss out on a lot of additional perks. Compensation is more than base salary; it's the overall package of employee health benefits and incentives your employer offers. Total compensation enhances your overall job offer. Ensuring that your job suits your current needs and lifestyle is important. Some things to look for are:
Flexibility - Are hybrid, remote or flexible working hours important to you?
Vacation time - Is time-off important to you? If so, how many days are offered?
Group benefit insurance - Is there a benefits plan? What is included in coverage?
Career advancement opportunities - Is there space for you to learn and grow?
Financial wellness - Do they offer group RRSP or other financial wellness programs?
Employee Benefits Plan - Saves You Money
Employee benefits are a non-wage form of compensation to supplement your pay. They help cover healthcare expenses for you and your dependents that are not included in your provincial healthcare plan. When an employer offers group health benefits, you get money back for services you might already utilize to better your physical and mental health.
When you think of healthcare expenses what comes to mind? Perhaps the dentist, prescriptions, massage therapy or psychology expenses. Your benefits package may provide you with coverage for these expenses, which is part of your overall compensation.
For example, one general visit to the dentist could cost a single person over $600 and a single family household over $1400. An employer benefit plan may offer dental coverage at 80% - meaning you could save $480 - $1120 per visit!
A benefit plan is a valuable part of your overall compensation package that offers you financial protection for the overall health of you and your family.
RRSP - Advantages & Uses
A group RRSP is a retirement savings plan sponsored by an employer to eligible employees. This is an investment account that can be used in a variety of ways.
Down payment on a house
Pay for education
Savings towards your retirement
Once enrolled in the program, your employer will deduct your agreed upon contributions from your payroll. All contributions are tax deductible and tax sheltered as long as it stays in your RRSP.
Invest More Earlier
A small monthly contribution to your RRSP can completely alter how much you save for retirement due to how interest builds. For example, by putting away $125 per month starting at 25 years old for 30 years, at a 5% return, you would have just over $100,000 saved.
In terms of compensation, look for employers that match employee contributions. Some match up to a certain percentage, and others may match dollar for dollar. While it doesn’t impact your immediate cash flow, it’s free money that provides you with an ever-growing savings account for your future and provides a tax break!
Your group benefits booklet provides a detailed list of what employee benefits you have. It will list the percentages covered, maximums, and all the paramedicals available to you, such as massage, physio or travel insurance.
A “benefit maximum” is the highest amount an individual can claim for that benefit. The insurance company only pays the employer up to the set amounts they agreed upon. For example, if you have a $500 limit for massage, once you’ve spent the $500 you’re no longer covered and have to pay out of pocket until the next benefit year. Look at your top health expenses, or which employee health benefits matter the most to you, review the costs per session and maximums - these savings are also part of your overall compensation.
Additional Compensation Opportunities
Further to employee benefits and retirement savings plan, you should also evaluate the following:
Paid Days Off - Paid days off can make a big difference in your compensation. Ensure to look into sickness benefits, vacation days, and any flex days offered.
Career development - Is this job offer willing to help you upgrade your education? Do they have programs in place for personal development?
Flexibility - Figure out what type of flexibility is important to you. An employer may offer fully remote work, hybrid or in-office 5 days a week but with flexible hours.
Your overall compensation package can add thousands to your salary. When considering a job offer, be sure to consider the full compensation instead of just the salary or you’re leaving money on the table!