Most people only state cash pay, if they bother to calculate it. In general, they seem to ignore the value of benefits, even though they can be substantial (and also variable depending on the person, since some may value a particular benefit much more than others do; the value to the employee may be more or less than the cost to the employer of providing the benefit). Stock options and non-guaranteed bonuses are obviously hard to value for financial planning purposes until later. Of course, some people (e.g. sales people paid primarily by commission and those who mainly do short term contract jobs) could have substantially variable pay that is not that predictable ahead of time.
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Lol, I don’t mean me… Lol… New graduates spew this information around all the time but I never know what it entails since some do include the “price” of their package. Like I make X but my full package is actually XY.
Got it. Thx for the explanation.
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Anything that is non contingent and is a cash payment (excluding health care, transportation benefits etc) can be summed up. Stock options are tricky — if you want, you can add the market value of what they are worth today. People usually don’t add the 401k match in this number, although a 401k match can be mentioned separately. Relocation is not mentioned. Sign on is mentioned separately because it is one time. If year 2 is going to matchup to year 1 without the sign on , you can add the sign on and mention that you expect year 2 to be flat. People just give a round number taking everything into consideration, if they feel compelled to say something.
Also there is a lot of nuance in terms of which pieces of the comp are prorated for the stub year and which pieces are paid as stated. And if there is a clawback if you leave within the year etc.
Incidentally we realized that sign ons taken before the join date are not 401k matched, but you are foregoing potentially many months of market returns, and, separately, you are exposed to the credit of the organization — if anyone else is in that situation …
No one needs to know this level of detail about the kid’s comp anyway, except me the parent just because …
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One example of how many people ignore the value of benefits when considering how much their job pays: medical insurance. How many people know how much it would cost to buy medical insurance if they did not get it from their job, or know how much their employer is spending on the medical insurance provided to them?
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I do. What my employer pays for our health insurance (and all benefits) is listed on every pay stub, line item by line item just like my deductions. And their contributions to everything are also tallied up as a total. It’s been this way since I started in the mid-late 1990s. They also list out their contributions to every benefit plan in the open enrollment packet each fall
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I think it was costing something like 40k for a family of 4 5-7 years ago for my company for reasonable insurance — they were splitting this number with me. I haven’t checked recently, but I shudder at the possible number.
Daughter graduated with an Economics undergrad degree 2 weeks ago starts her job outside of DC in July. $94k base with an additional $16k signing bonus and $1,500 moving allowance.
Plus 401k match 7.5%, health insurance ($35/paycheck) and ESPP
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I just checked ours. Our costs (employee plus employer) $24K per year for a family plan. But this is for a $5000 per person/10K family high deductible plan through a small regional carrier. Anthem BCBS got too expensive for us about 10 years ago.
And this is just health - no dental/vision
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Great question! 
I struggled with this early in my career (not because I went around telling people what I make, but when asked on say, a credit card or car loan application).
I never counted non cash benefits like health insurance and other perks. And I only counted actual or expected cash payments in the current year. Essentially, base salary and an estimate of expected cash bonus. I would not count any unrealized compensation (unvested stock options, RSUs, deferred compensation, etc). Since bonuses can vary significantly from year to year, it’s easier to answer “how much did you make last year?” vs “how much will you make this year?”.
In hindsight I realize I under reported because I didn’t count 401(k) matches and the value of stocks and options that vested in the current year.
Anyway, tying this back to OP: when someone says how much they make - their calculation can vary significantly, so it’s hard to compare. It’s more important for your son to know if he is being fairly compensated for the role he is in, at that company, at that location. Versus what his friends are making elsewhere under different scenarios.
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It’s base pay (cash) + RSU, stock options, etc for publicly traded companies total grant divided by number of years+ bonuses . 401k, gym pay, health benefits, etc are expected from all reputable companies and not part of calculations. Everyone has their own way to compare offers based on what is important to them of course.
Thx all. Let’s get back to the OP. Didn’t mean to sidetrack and hopefully this is helpful information for them. Explanations were helpful.
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Unless I did something wrong when you press on the icon to the right of the major it states these are for 4 years avg after graduation
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I think $50k is a good salary for a 22 year old. If it also includes insurance, time off, any other benefits, even better. (it wasn’t clear from the OP whether it is an hourly position or a salary). If the market supports more, that will become clear very quickly and OP’s son will gain some experience before moving on to the next job.
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That sounds reasonable. More important, it’s a start of a resume and hopefully, an opportunity to learn and build skills. My general advice to young people is to prioritize the latter when selecting positions.
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Cost of Living (COL) is a big factor. There are various online calculators to do comparison.
For example, this one shows $100K in Manhattan lives about the same as $40k in Nashville. Usually when you dig into the details, housing cost is the major difference.
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Thanks for all the advice. It appears that this is a fairly solid offer:
In addition to the hourly pay (which I’ve never heard of in a full time position)
Healthcare with $0 employee contribution and very, very low deductibles - starts day 1
21 days annual leave
Life Ins.
Dental & Vision w $0 employee contribiuion
Contribution to 401k after 1 year employments
Tuition Assistance plan
Relocation allowance (very generous w taxes paid by employer)
Long Term Care $0 employee contribution
On-Site wellness & health facilities
And several other benefits which don’t apply as much
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No matter the starting salary, 401k contribution up to the match probably makes sense coupled with a Roth IRA.
If you feel like there’s an upward trajectory in future salary, consider that tax deduction and deferral may not be super advantageous beyond the match compared to a Roth IRA.
Also, maxing out the HSA contribution may be a good idea as well given the triple tax advantage of tax deduction, tax deferral and potential tax free.
Those sound like amazing benefits! And my first (civil engineering) employer, everyone was hourly, including the president/founder. We had a very low hourly wage, but we made 1.5x over 40 hours. It was expected that engineers would work 50 hours and it would be more in line.
If the health plan has a very low deductible, it doesn’t sound like an HSA plan?
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Those sound like fantastic benefits. I would definitely recommend that he start contributing to his 401(k) immediately, even without a match until after the first year unless the plan options have high fees/any loads (anything over 0.5% is high imo, even if common), in which case he should stick with maxing a Roth IRA and putting money into taxable if he has ‘extra’.
He probably doesn’t qualify for an HSA, usually you need to have a high deductible health plan for an HSA to be available.
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