‘What is gross pay?’ and other questions about salary, benefits and incentives
What does DOE salary mean, what are employee benefits and what is meant by a golden hello? Discover what you could receive when you start your first graduate job.
Whether you’re applying for graduate jobs, deciding between offers or about to start work, don’t miss our glossary of pay-related terminology so that you can be clear about what you’ll earn.
And it’s not just about salary; many graduate jobs offer a range of other employer benefits and staff incentives. A number of large graduate employers allow you to customise or ‘choose your own’ perks from a range of options. 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.
A graduate’s glossary of salary jargon
Read on to discover the meaning of:
- Base salary
- Golden hello
- Gross salary
- Net salary
What is base salary?
Your base salary , sometimes called basic salary or base pay, is the minimum you’ll earn for the amount of time you’re contracted to work during a specified period – without any overtime/on-call pay, bonuses, commission or other financial incentives. This can be expressed as either an hourly rate or annual salary. Examples of jobs that typically pay a base salary plus extras such as commission include careers in sales as well as stockbrokers , estate agents , literary agents and travel agents .
What is a bonus?
It’s pretty obvious... bonuses are extra payments. They’re often related to the organisation’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.
What is commission pay?
If you work in a role relating to sales or marketing, you may get commission . You have a basic salary and you also receive a percentage of the profit for each sale you make or once you’ve reached or exceeded a target. You have more motivation, which is good for you and for the company.
What does DOE mean for salary?
Salary DOE stands for ‘salary depends on experience’, meaning it is negotiable depending on how much relevant experience the successful candidate has. You’re more likely to see it on job descriptions for experienced hires where the employer is flexible about the exact amount of experience they require, as it tends to be used as a reward for candidates who have experience beyond the minimum requirements of the job. If you do come across ‘salary DOE’ in job postings, it will help to read our advice on how – and whether – to negotiate salary during the recruitment process .
What is a golden hello?
A golden hello , sometimes referred to as a golden handshake, 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.
What is gross salary?
Gross pay or gross salary is the total salary earned, comprising the base pay along with any commission and bonuses.
What is a net salary?
Net salary is your gross salary minus income tax, national insurance, pension contributions, student loan repayments and other deductions. It’s the actual amount that you receive in your bank account on payday.
What does OTE mean in salary?
OTE on salary descriptions stands for ‘ on-target earnings ’ or ‘on-track earnings’, meaning the base salary plus variable extras such as commission and bonuses. This is normally used for sales-related roles and is based on the projected commission you can expect to earn if you meet all sales targets or other performance goals. The OTE salary is similar to your gross salary except that it’s just a prediction of the maximum your gross salary could potentially be. Knowing the base salary will allow you to work out how much of the OTE will depend on your performance, so it’s a good idea to clarify what the base salary is if it isn’t mentioned on the job description.
Employer benefits offered alongside your salary
While not included as part of your salary, commission or bonus, the following are commonly offered as part of an employee benefits package and will help to save money that you might otherwise be spending yourself:
- Company car. A free car from your new employer? Sounds fantastic... what’s the catch? Bear in mind that there are financial implications – for example, if you use the car for personal use, you will be expected to pay income tax – and so investigate all of your obligations before accepting. Some employers will offer you a car allowance, paid with your salary, if you decide not to take a company car.
- 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.
- Pension plan. It may seem 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. If you are earning more than £10,000 and are aged over 22, your employer will automatically enrol you in its pension scheme, 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 government pays back the tax you paid on it. 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.
- Mobile phone, laptop and/or other devices. Some companies provide you with communications equipment for work. This is particularly useful if your job entails lots of time out of the office or you work from home. Some are exclusively for work-related use, but your employer may cover some personal use as well. Learn more about what to expect from hybrid and remote working .
Extra incentives offered by employers
Some other 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. Some offices, particularly in the City, will have their own in-house gym.
- Free breakfast. Some employers advertise free breakfast when it is in fact just free fruit. Others do offer a legitimate version of breakfast. If you think you might rely on this, maybe check out informally with some of the employees how substantial it is!
- Subsidised café/canteen. If it doesn’t offer you free food, an employer may well subsidise the purchase of lunch, snacks and coffee by subsidising its in-house restaurant.
- Retail discounts/vouchers. A number of employers have corporate agreements with certain brands or retailers to offer you money off purchases. These could include entertainment venues, such as specific cinema chains or theme parks, too. A definite advantage if you’re a shopaholic!
- Travelcards or season ticket loan. Some employers may either subsidise or help you manage your commute on public transport. Sometimes they will offer a London Underground Travelcard or a 16–25 railcard or a season ticket; sometimes they will offer an interest-free season ticket loan, which you usually repay in instalments out of your salary each month. Obviously, these perks will not help you if you plan to drive to work!
- Cycle to work scheme. This government initiative aims to encourage more people to commute by bike. The cost of a bicycle and cycling equipment is deducted from your payslip over a number of months so you don’t pay tax or national insurance on these.
- Well-being initiatives. Some large companies have on-site counsellors and masseuses for their employees or offer employees a ‘wellness budget’ that they can spend on an activity that enhances their well-being. While a 3.00 pm shoulder rub might sound nice, this might well reflect a stressful environment or long working hours.
- Holiday-related choices. Every full-time worker and employee is entitled to 28 days’ holiday per year, but this number can include bank holidays. Many employers allow you to ‘buy’ extra holiday, sacrificing some of your holiday, and a few even give you your birthday off as an extra day of leave if it falls during the week. A few employers have made news headlines for actually giving 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.
- Volunteering days. Some companies offer a certain number of hours or days each year as paid time off to do voluntary work. They enable you to give something back to the local community or a charity without taking up time from your holiday allowance or weekends.
Got a job offer?
The benefits listed on this page certainly aren’t the only reasons for applying to a job or accepting a job offer, but they are worth taking into account. To find out how to ask about benefits after a job offer, take a look at our article on deciding whether to accept a job offer and choosing between multiple job offers .
Check your contract
Your base pay, entitlement to any bonuses or commission and use of a company car or laptop, for example, should be outlined in your contract of employment. It’s important to read through this carefully before you sign it, so that you understand what you can expect and what’s expected of you in return. Our guide to employment contracts will help you with this.
The salaries, perks and benefits offered by different graduate employers
To find out more about salaries and benefits for popular graduate professions, read our guides to salaries and benefits in specific industries:
- Which graduate career offers the best pay?
- Accountancy and financial management salaries and benefits
- Civil engineering, construction and surveying salaries
- Consulting salaries and benefits
- Engineering benefits and bonuses
- Insurance, retail banking and actuarial salaries and perks
- Investment banking and investment salaries
- IT salaries
- Law (barrister) salaries
- Law (solicitor) salaries
- Property salaries and benefits
- Public sector salaries
- Teaching salaries