When you weigh up the value of your existing job or a new one, remember to take these valuable benefits into account!
Earlier this week, I was suffering from an acute form of `package envy'. Ooh err!
This happened when I compared the meagre benefits I receive to those my wife's employer deals out. As a freelance writer, I have set up a private limited company to manage my affairs. My company pays me a very modest salary, which is boosted by irregular dividends.
On the other hand, my wife works for a massive global company which makes billions each year. Hence, as a leader in its field, this multi-national company can afford to offer generous benefits to its employees. In order to demonstrate just how valuable these extra benefits are, my wife's employer sends out an annual `reward report' to its employees.
Indeed, by my reckoning, these extras add perhaps four-fifths (80%) to my wife's basic salary. So, when placing a value on your existing job, or a potential employment opportunity, do take the following extras into account (in alphabetical order):
Basic salary
When it comes to valuing a position, the basic salary should be your entry-level benchmark. Also, when negotiating a better package, most people focus on salary. What's more, your basic salary is important when you apply for mortgages and other credit.
Bonus
Although multi-million-pound bonuses are paid to top City players, most bonus schemes are far more modest. Typically, you may earn between 10% and 30% of your salary on a performance-related basis. In most cases, what you receive will depend on your own performance and the company's financial success.
Car (or car allowance)
Having a company car (or the cash equivalent) is another valuable benefit. Which vehicle you receive usually depends on your seniority and your expected mileage. With fuel prices hitting record highs, having your personal fuel bill paid for you is another bonus. However, as with most benefits in kind, you pay tax on your company car, based on its value and CO2 emissions.
Childcare support
For working parents, childcare support is a terrific help. For example, my wife's company gives her tax-free childcare vouchers worth £55 a week, saving her almost £100 a month in tax and National Insurance contributions. In addition, it provides an emergency-nanny service for employees, plus a holiday play-scheme which costs half as much as profit-making ventures. Some generous employers even go so far as to provide an on-site crèche for employees' offspring.
Dental insurance
These days, it's incredibly hard for adults to find an NHS dentist. Hence, it's very handy if your employer provides dental cover, as you're unlikely to find a cheaper individual plan. Even better, some firms pay your premium, so you pay only the tax on this benefit.
Employee assistance programme
Often, working life can get stressful, which is bad news for both employers and employees. Thus, enlightened employers offer impartial, independent counselling services from the likes of EAR, the Employee Advisory Resource. These services prove a valuable lifeline when times are tough.
Holiday pay
Everybody, even the most hardened workaholic, needs to take a break now and then. Although four weeks' paid holiday is the norm, some firms offer five or more weeks of vacation time. In fact, after forty years at the same organisation, my father now gets eight weeks' time off each year!
Income protection
Income protection is an insurance policy which pays out monthly benefits if you are unable to work following an accident or injury. This type of long-term protection is both expensive and complicated to buy, so getting it from your employer is a big plus.
Life insurance (`death in service' cover)
Likewise, buying life insurance can be complex and costly, so let your employer take the strain. Typically, an employer will provide life cover of three or four times your basic salary.
Pension
A generous employer-sponsored pension scheme is worth its weight in gold. Alas, the `gold standard' for occupational pensions, the guaranteed final-salary scheme, is now dying out. My wife is lucky enough to be a member of a final-salary scheme, yet she pays only 3% of the 25%+ it costs to fund this benefit! Hence, it is crucial to find out about pension provision before joining an organisation.
Private medical insurance (PMI)
Around six million people in the UK are covered by private medical insurance, the leading provider of which is BUPA. This cover enables them to dodge NHS waiting lists, get quick treatment for minor conditions, while enjoying a private room and decent hospital food. Again, PMI is expensive and difficult to buy individually, so do join your employer's scheme.
Sharesave (alias Save As You Earn, or SAYE)
As I explained in Ten Ways To Win With Shares, Sharesave is a great way to buy shares in your employer at a discount. Around 2½ million employees of listed companies use SAYE to save between £5 and £250 a month and then buy shares at a discount of up to a fifth (20%) off the market price.
Share options
As part of her long-term incentive plan, Mrs D'Arcy receives free share options in her company. These give her the right, but not the obligation, to buy shares at a fixed price after three to ten years. When her employer's share price has risen strongly, these have proved hugely profitable. Alas, in this market downturn, her latest batch of share options is a busted flush for now!
Sick pay
As I run my own company, being off sick could be a real pain (pun intended). However, as I work from home, I'd have to be very ill not to be able to write. However, were I to look for another job, then I'd make sure that my new employer provided sick pay for at least one month and, ideally, at least three months.
Share incentive plans (SIPs)
Finally, share incentive plans allow companies to give their employees free shares worth up to £3,000 each year. Other SIPs allow employees to invest up to £1,500 a year of their pre-tax income into shares, and even enjoy `buy one, get two free' deals. For example, my wife's `buy one, get one free' plan enables her to buy £3,000 of shares for just £885 a year. Nice!
In summary, when weighing up a job, always look beyond the basic salary. Any cash, lifestyle, protection and investment benefits on offer can dramatically bump up the value of your package. So, don't forget to take them into account, or you may lose out.
More: Find quality quotes for insurance via the Fool | A New Way To Boost Your Pension | Money-Saving Tips For Real People