How to negotiate your remuneration package (with examples)
So you’ve been offered a new job and it’s time to negotiate your remuneration package. On top of your salary, a remuneration package includes bonuses, company perks, leave and other incentives that shape your overall compensation.
Learning how to negotiate your remuneration package is a crucial skill in ensuring you’re fairly compensated and getting the most out of your job, positively impacting your wellbeing at work.
Before you begin negotiating your remuneration and benefits package, it’s essential that you know exactly what’s included. In this article, we take a look at different types of remuneration packages and some practical strategies for negotiating yours.
What is a remuneration package?
A remuneration package refers to the complete compensation and benefits bundle your employer offers in exchange for your labour. This includes a salary figure, along with other perks including flexible work arrangements, paid time off and extras like gym memberships.
Every company is different when it comes to the specifics of the remuneration packages on offer. Deciding on exactly what you would like your remuneration package to include – meaning not just your salary, but also other employee benefits – will set you up for successful negotiations.
Components of a remuneration package
Generally, there are two types of remuneration included in a package: direct and indirect compensation. Direct forms of compensation involve anything that goes directly in your bank account (salaries, bonuses and commissions). Indirect forms of compensation include all other benefits and perks (health insurance, paid time off, and things like company cars and stock options).
Here are some different remuneration package examples involving both direct and indirect compensation.
Direct compensation
- Salary: a fixed amount paid regularly, typically on a monthly or bi-weekly basis
- Hourly wages: compensation based on the number of hours worked by an employee (commonly used for part-time or hourly positions)
- Commissions: monetary incentives awarded to employees for hitting sales targets or other goals
- Bonuses: any additional payments offered to employees as a reward for exceptional performance and/or loyalty
Indirect compensation
- Flexible working arrangements: options like remote work or flexible hours that enable employees to have better work/life balance
- Paid time off: vacation days, sick leave and other types of leave, promoting work-life balance and employee wellbeing
- Retirement plans: savings programs or retirement-related benefits that allow employees to prepare for long-term financial security. These are different from superannuation contributions, which are mandatory in Australia.
- Company car benefit: providing employees access to company cars for both professional and personal use, often for roles requiring travel or client interactions.
- Equity-based programs: stock options or equity grants offering employees ownership in the company.
- Additional perks: gym reimbursements, transit or meal allowances, employee discounts and other perks designed to increase employee satisfaction and loyalty.
How to negotiate your total remuneration package
Negotiating your total remuneration package is about making sure you’re getting the pay and perks that reflect the value you bring to your employer. The process of negotiation can be broken down into the following strategic steps.
Prepare to negotiate
Before you enter into negotiations, it’s important to be well prepared. Research what other people in your position and with your experience are getting paid in your industry. This will help you determine what’s reasonable when considering compensation amount and what kind of benefits to ask for. Make sure your research applies to jobs in your location, and don’t forget to factor in things like the cost of living when you’re thinking about your desired remuneration.
Initiate the negotiation
The offer stage is where the negotiation takes place. When you’ve been offered a job by a company, don’t be shy about asking if there’s any flexibility on salary and benefits. Let them know that you would like to talk about your remuneration, to make sure the offer lines up with industry standards and what you believe your skills are worth.
Sometimes a negotiation may not be possible at first. However, you can ask about the potential for future re-negotiation. This usually means being prepared for upcoming performance reviews, so you can revisit the terms of your contract at a time when your value to the company is already in discussion.
Evaluate your take home pay
Once you have an offer, factor in taxes and other deductions (like travel expenses) to calculate what you’ll realistically be taking home. This will give you a clearer picture of what you’re negotiating.
Relook at your benefits
Think about which extras would make a real difference to you, whether it’s more days off, stock options, working from home, or a gym membership. You can also request an annual benefit statement (also known as a total compensation statement) to understand the full value of your package.
Time for consideration
It’s okay to take time to consider the offer and research the value of your benefits before you say yes. Let your potential future employer know that you need a few days to evaluate the offer before accepting. It’s important to make sure it’s the right move for you and not feel pressured to accept an offer that doesn’t meet your minimum.
Get it in writing
Once you’ve worked out all the details of your package, make sure everything’s in writing. This includes your salary, leave and any other agreed-upon perks. You can ask for this in the form of a final offer letter, which ensures everyone’s in agreement – and avoids any confusion at a later date.
Your remuneration package should reflect your value, provide financial stability, and contribute to a sense of job satisfaction. Though you might be eager to secure a new job as soon as you receive an offer, it’s important to understand all the components of your remuneration package first, so you know if the package is right for you or if you need to negotiate. When it comes to the negotiation stage, be prepared to justify what you’re asking for with plenty of research so your package reflects what you’re worth.
FAQs
What is the remuneration salary?
A remuneration salary is the set amount of money you get paid for doing your job, generally expressed as an annual amount and paid monthly or bi-monthly. It’s the main component of your whole compensation package, which includes additional benefits and perks.
How to calculate a remuneration package?
To calculate your remuneration package, start by adding up your base salary with any bonuses and commissions. Next, tally up the value of any benefits or perks you’re receiving, like health insurance, retirement contributions and memberships. The total amount is equal to the value of your remuneration package.
What is a remuneration package based on?
There are numerous factors, including industry standards, market trends, job role complexity and employee experience that can affect your total remuneration package. In Australia, remuneration packages include mandatory superannuation contributions and leave entitlements, alongside any extra perks offered by employers.
What is a package in terms of salary?
A package in terms of salary refers to the total compensation an employee receives. That includes your pay figure (salary) plus any bonuses and commissions, alongside other perks and benefits you’re getting.
What is the annual remuneration?
Your annual remuneration is all the pay (including bonuses and commissions) you receive for doing your job over a twelve-month period. It’s the grand total of what your employer gives you in direct compensation throughout the year.
What factors should I consider when evaluating a take-home pay offer?
When you’re evaluating a take-home pay offer, there are a handful of factors that may affect your final compensation, including taxes, insurance premiums and other expenses. Write out a list of these potential costs and calculate how much will be deducted from your pay.
What should I do if the company is unwilling to negotiate salary?
If the company is unwilling to negotiate salary straight away, check whether there’s any flexibility on other perks and benefits. This can be an alternative way to approach negotiations. You can bring up the idea of salary negotiations further down the road, perhaps after a probationary period or a performance review. By demonstrating your value to the company, you’re in a better position to successfully negotiate your salary.
What happens if the offer letter doesn’t include the agreed-upon remuneration package?
If the offer letter doesn’t match up with what you agreed on for your remuneration package, make sure you bring it up with your employer straight away. Ask for a new offer letter that clearly outlines exactly what you’ve both agreed to. Accurate paperwork protects you and your employer by clearly defining your role and compensation.
