Salary, benefits and incentives: a jargon buster
It’s not just about salary and progression; many graduate jobs also offer a range of other benefits. We’ve put together a guide to popular perks you might be offered at work, their true value and which to choose if your employer is flexible.
- Bonus It's pretty obvious... bonuses are extra payments. They're often related to the company's performance, but some are awarded for individual excellence. Many companies give a Christmas bonus, which can be useful for buying presents or if you want to soak up some winter sunshine.
- Commission If you work in sales or marketing, you may get commission. You have a basic salary and for every sale you make you get a percentage of the profit. The more you sell, the more you earn. You have more motivation, which is good for you and for the company.
- Company car A free car from your new employer? Sounds fantastic... what's the catch? Bear in mind that there are financial implications; company cars are taxed on the basis of the price when first registered. You may want to consider whether you need a car with a large capacity or whether running a car with a smaller engine could improve your income tax situation. As a result of rapid depreciation of new cars, many people are now opting for a salary increase instead of a car allowance. If you've already got a car, you may get an allowance, paid with your salary instead. This may be more economical if you don't plan to drive much. If you do want to take the company car, find out whether you or the company will be paying for the petrol, and if you get any personal mileage.
- Golden hello A golden hello is a special bonus awarded when you join a company. Employers realise that moving and starting a new job can be expensive, so a golden hello is designed to help you settle in to your new position. You could use the money to buy new clothes for your new job, as a rental deposit on a house or flat, or for a season ticket.
- Health insurance Private health insurance means you'll be able to have consultations, tests and operations without joining the end of an NHS waiting list. It's just like any other health insurance, but you don't have to pay for it. In some cases the insurance will cover your immediate family as well. Again, bear in mind that you will have to pay income tax on the cash value of the health insurance. There may also be 'excesses' on some forms of treatment.
- Mobile phone You know what the mobile phone is. Some companies provide you with one for calls connected to work. This is particularly useful if your job entails lots of time out of the office. Some phones are exclusively for work-related calls, but your employer may cover some personal calls as well.
- Pension plan It seems ridiculous to start saving for your old age when you're starting your first job, but it's not. Really. All companies must now offer some form of pension scheme and they must pay at least the minimum contribution. Large companies often have their own schemes, others have recommended providers. If you are earning more than £10,000, your employer will automatically enrol you in its pension scheme when you start work, though it is possible to opt out if you want to. Usually you put in a little money each month, your company puts some in too and the tax man returns some of what he took. By the time you reach retirement, you'll have a nice pot of money. If you decide to opt out, you are effectively rejecting an extra bit of money your employer wants to give you. But, of course, you have to make an informed decision on the best action for you at any given time.
Some smaller incentives you may also come across include:
- Free gym membership This does what it says on the tin but, if this is an important part of the package for you, it is worth checking that the chosen gym will meet your needs and is in a convenient location for you.
- Free breakfast Some companies advertise free breakfast when it is in fact just free fruit. Other companies do offer a legitimate version of breakfast. Again, if you think you will rely on this free breakfast you should clarify that it is substantial and won't leave you having to buy an expensive coffee shop snack at 11.00 am.
- Travelcards Subsidised public transport could be part of your benefits package; it might be a London Underground Travelcard, a 16-25 railcard or a season ticket. It's usually quite easy to gauge whether their offer will apply to your journey. Bear in mind that these will not help you if you plan to drive to work however.
- Wellbeing Some large companies have on-site counsellors and masseuses for their employees. While a 3.00 pm shoulder rub might sound nice, this might well reflect a stressful environment or long working hours.
- Uncapped holiday Some companies have a limitless holiday allowance. However, don’t think this means you can work two weeks a month; companies tend to do this when they’re confident that you will be invested in your work enough to be sensible with your annual leave. You should also consider that this means you don’t get reimbursed the holiday you don’t use up, which is a system many companies use.
To find out more about salaries and benefits for popular graduate professions, read our 2018 guides to salaries and benefits in specific industries:
- Accountancy and financial management salaries and benefits
- Civil engineering, construction and surveying salaries
- Consulting salaries and benefits
- Consumer goods pay and career progression
- Engineering benefits and bonuses
- Insurance, retail banking and actuarial salaries and perks
- Investment banking and investment salaries
- IT salaries
- Law (barrister) earnings
- Law (solicitor) earnings
- Property salaries and benefits
- Public sector salaries
- Teaching salaries
For specific companies’ pay packages and perks, check out Inside Buzz for insider reviews from graduates and interns.