Benefits that Change Your Net Pay (and Why It Matters)
Benefits like 401(k) contributions, HSA/FSA, and commuter benefits can reduce your taxable income (federal/state), increasing your take‑home. After‑tax benefits (like some insurance) don’t reduce taxes but still lower your paycheck.
- Pre‑tax: 401(k), traditional 403(b), HSA, FSA, commuter.
- After‑tax: Roth 401(k), some life/disability premiums, extras.
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Pre‑Tax vs After‑Tax Benefits
Pre‑tax benefits like traditional 401(k), HSA, and commuter plans reduce taxable income, increasing your take‑home. After‑tax benefits (like Roth 401(k) or some insurance premiums) don’t reduce current taxes but may have other advantages.
Assigning Dollar Values
Try to estimate the value of health insurance employer contributions, PTO, and retirement match. For example, a 3% 401(k) match on a $60,000 salary is $1,800/year—effectively added compensation.
Negotiation Tip
If a company can’t meet your base target, ask for a signing bonus, relocation assistance, or education stipend. Those can materially change your first‑year net.