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7 Things to Consider When Negotiating a Salary

A common misconception is that the most important part of a job offer is the base salary. However, salary is just one part of what most companies like to call your total compensation. Only 40% of workers today negotiate their salary - that’s a lot of money left on the table. The first step to negotiating is to understand what goes into total compensation. This will help you better evaluate your offer and increase your negotiating power.

Let’s break it down:

Base Salary
The base salary is the number most people are familiar with and simply put, it is the amount you are paid every year before taxes. This excludes the value of any benefits, overtime and anything extra that you might earn.

Annual Bonus

This is a bonus usually provided by larger public companies and is presented as a percentage bonus on top of your salary. Bonuses are usually based on performance and therefore can be a complicated subject for companies. They tend to be discretionary and usually a manager can determine how much and to whom a bonus goes to. For sales-type roles, these can be presented as commissions you can earn based on your performance. Bonuses can be harder to negotiate but knowing upfront if they are available to you is important.

Signing Bonus
A signing bonus is usually a one-time lump-sum amount given to you on signing your offer or on the first day of your job. These can range anywhere from $10K - $100K depending on your role. Typically they come with a clause saying you have to return it if you leave before a certain date. Companies offer signing bonuses to beat their competition and attract employees they really want. Signing bonuses are highly negotiable.

*It is important to consider the difference between a signing bonus versus a salary bump. A $6,000 increase in your annual salary is more valuable than a $10,000 signing bonus if you stay at that company for at least 2 years (salary bump would be $12,000).


These vary from company to company but can be anything from healthcare, 401K matching/retirement plans, free food/catered meals, paid vacation days, maternity/paternity leave, sick leave, childcare, fitness, tuition reimbursement, student debt payments, etc. Some of these benefits such as healthcare are required to be offered by large companies. These are all negotiable aspects of your total compensation package so don’t be afraid to ask for a higher retirement matching or if you can work from home on Fridays! Considering which ones are the most important to you can help you negotiate more effectively.

Equity refers to the ownership stake in the company. This is a very common offering for many tech companies. Equity can be offered in a couple of different ways: options, restricted stock, and performance shares. Equity allows employees to share in the profits through appreciation. Often times equity will also come with a requirement such as a number of years you have to be employed before you can fully earn from it.

Paid Time Off
Many companies will offer paid time off (PTO) along with federal holidays and paid sick days. Paid time off can also be called vacation days. Some companies will have a company-wide policy on how many days they offer per year but this can still be negotiable. At some companies, employees will accrue PTO as they work throughout the year. On average Americans get about 10 paid vacation days after a year of employment so if your company isn’t offering any PTO, you can negotiate for more days.

Other Perks
Your total compensation can also include beneficial perks such as relocation stipend, commuter benefits, shuttle service, etc that could make a job offer be a lot more competitive and valuable. If you have a long commute or are moving for a job, these incentives can save you a lot of money over time.

It can be easy to jump on the job that gives you the highest base salary but total compensation includes so much more than just that. Understanding each of these components and evaluating their worth can help you get the money you are worth!

Checklist for Total Compensation

Have you negotiated all of these elements?

  1. Base salary
  2. Annual Bonus
  3. Signing Bonus
  4. Benefits
  5. Equity
  6. Paid Time Off
  7. Other Perks


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