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Compensation

Total compensation vs salary: compare the package correctly

Base salary is the most dependable line in an offer, but it is not the whole economic decision. Total compensation is useful only when every component is valued with an honest probability and time horizon.

Guaranteed, variable and speculative

Keep base and fixed allowances separate from target bonus and equity. Discount variable pay when the rules or payment history are unclear. Treat private-company equity as speculative unless you can assess price, dilution, vesting and liquidity.

Annualize with the same assumptions

Compare offers over the same twelve-month period. Include sign-on repayment clauses, vesting cliffs, retirement contributions, health premiums, paid leave and recurring travel or office costs. Do not compare one offer’s best case with another offer’s guaranteed case.

Use the number to make a decision

The goal is not the largest spreadsheet total. Decide what package compensates you for risk, scope, location and the opportunity cost of leaving. Record that move price before the offer creates pressure.

Live market snapshot

Frequently asked questions

Is bonus part of total compensation?

Yes, but use expected rather than maximum bonus and keep it separate from guaranteed salary.

How should equity be valued?

Public equity can use a conservative market value. Private equity needs a heavy discount for uncertainty, dilution and lack of liquidity.

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