Your questions answered: Salaries, benefits and incentives explained

When you’re navigating the job market after graduation, pay-related and benefits jargon can be confusing. In this article, we explain some of the more common terminology so that you can be clear about what you’ll earn.

What is base pay or basic salary?

Base salary is the minimum amount you’ll make for the time you’re contracted to work. This is given for a specified period of time and does not include overtime or on-call pay. It also excludes financial incentives such as bonuses and commissions.

What is a commission? and a bonus?

Many sales employees are paid a commission apart from their basic pay. The commission pay is a percentage of the profit for each sale you make or once you’ve reached a target. It is intended to motivate you to reach and exceed targets.

Bonuses are extra payments. Bonuses are typically tied to either company profits or individual performance. Some employers also give a Christmas bonus.

What does salary DOE mean?

DOE stands for ‘depends on experience. This means that the salary is negotiable and depends on how much relevant experience you possess. It is more common when the employer is seeking an experienced hire and is flexible about the amount of experience they require. It is a way of rewarding candidates who have experience beyond the minimum requirements of the job.

What is net salary? and gross salary?

Your gross salary is the total amount of money you have earned, including bonuses and commissions. Your net salary is your gross salary minus income tax, social insurance (PRSI), social charge, pension contributions, student loan repayments and other deductions. It is the amount you actually receive in your bank account after payday. You can use a salary calculator to find out your salary after taxes. Deductions such as student loans and pension contributions vary on an individual basis.

What does OTE mean?

OTE stands for ‘on-target earnings’. This means base salary and variable extras such as commissions and bonuses. OTE is common in sales roles and is based on what you’ll earn if you meet your performance goals. Essentially, it is the maximum gross salary you could earn. If the base salary isn’t specified, it is a good idea to ask about it. This way you’ll know how much of your income is dependent on performance.

Employer benefits which may be part of the package

Some benefits are not included in your salary but are part of the employee benefits package. They will help you save money on things you would have had to pay for yourself.

Company car: A free car from your employer may sound great, but make sure that you understand the terms and conditions first before accepting. For example, if you use it for personal use, you may need to pay income tax. Some employers may offer you a car allowance if you opt not to take a company car.

Private health insurance: Health insurance is a common benefit. In some cases, it also covers your spouse and dependents. Health insurance plans vary on what they cover, and you might still have to pay ‘excesses’ on certain treatments.

Pension plan: You might think that it’s too early to start saving for retirement, but the earlier you start, the better. Typically, pension schemes work by you putting in a little bit of money each month. You won’t be taxed on the money you put in and your employer will match a certain amount. If you opt out, you’re essentially rejecting the bit of extra money that your employer would otherwise put into your account.

Phone, laptop and other devices: If your work requires you to work outside the office, or offers you the flexibility to work from home, your employer will likely provide you with communication equipment for work. Laptops are very commonly provided these days, but some employers also provide mobile phones. Some are to be used exclusively for work, but your employer may cover personal use as well.

Extra incentives: Your employer might offer extra incentives such as a gym membership, free food, a subsidised canteen, retail discounts/vouchers, subsidised transport, a cycle to work scheme, unlimited PTO (paid time off) and well-being initiatives.