GLOSSARY · INCOME & SELF-EMPLOYMENT

Total compensation

Everything an employer pays for your work in a year, not just base salary: bonuses and commissions, equity such as stock units or options, retirement contributions, health and other benefits, and paid time off. Comparing jobs on total compensation, with uncertain parts discounted, gives a truer picture than comparing salaries.

Also called: total comp, total rewards, compensation package

FORMULA

Total compensation = base + expected variable pay + yearly equity value + employer benefits − your own benefit costs

COMPUTE IT WITH YOUR NUMBERS

Raise after tax and years-sooner-to-FI →What is a raise worth after tax over my career, and how many years sooner does it get me to FI?401(k) contribution and match calculator →How much can I put in my 401(k) in 2026, and am I getting the full employer match?RSU vest tax and 22% withholding gap →How much tax when RSUs vest and is 22% enough?Real hourly wage →What is my real hourly wage after commuting and work costs?

LEARN IT PROPERLY

CHAPTER · INCOME FUNDAMENTALS · FOUNDATIONSKnowing Your Market Value CHAPTER · INCOME FUNDAMENTALS · FOUNDATIONSCreating Value That Gets Paid

SOURCES

Employer Costs for Employee Compensation. U.S. Bureau of Labor Statistics.

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