4 ms·

Only because I'd rather ask and make sure I'm tracking acronyms properly while reading comments: TC is "Total Compensation" right? As in salary + equity and ot

by dvtrn 5y ago

Only because I'd rather ask and make sure I'm tracking acronyms properly while reading comments: TC is "Total Compensation" right? As in salary + equity and other benefits and etc? Or does it usually refer to just cash salary?

ddoolin 5y ago
Total as in including everything, right. Not just cash.
- dvtrn 5y ago
  And I'm only just now seeing at the bottom of the thread someone else asked the same and got an answer a few hours ago. Heh. But thank you!
fshbbdssbbgdd 5y ago
TC includes salary, stock, and bonus pre-tax. It doesn’t include 401k, medical, food or other fringe benefits.
- dvtrn 5y ago
  It doesn’t include 401k, medical Ahh interesting, I assumed it included things like bonuses and equity, but am surprised to learn 401k contributions are not considered TC. Is this the case even for matched contributions made by the employer? Meaning if I contribute x (money I was compensated already as a portion of salary), and employer contributes %/x (money the company effectively "gives" me), is that percentage not considered part of the "TC" terminology? OR am I exhibiting an unfortunate misunderstanding of 401k matches?
  - potatolicious 5y ago
    It's a factor one ought to consider - but at the salary ranges that we're typically talking about and at the typical match levels most employers offer, including 401K contributions doesn't change the math much, so it's mostly not counted. For example, an employer who does a 1:1 match up to the IRS limit would be contributing at most ~$20K to your total comp, but when you're dealing with the rest of the package being in the $500K-1M range it tends to get glossed over.
  - jandrewrogers 5y ago
    Matched contributions to 401k are generally not considered part of total comp because there is no implication that the match can be converted into cash immediately, though this is often the case. Similarly, HSA contributions by the employer usually are not counted as total comp even though it is a form of cash benefit. The rubric for all of these complicated and indirect forms of compensation is "benefits". These benefits are significantly limited in terms of practical cash value and rules around their use by regulation, whereas there is no bound on TC.

by dvtrn 5y ago

ddoolin 5y ago

Total as in including everything, right. Not just cash.

dvtrn 5y ago
And I'm only just now seeing at the bottom of the thread someone else asked the same and got an answer a few hours ago. Heh. But thank you!

fshbbdssbbgdd 5y ago

TC includes salary, stock, and bonus pre-tax. It doesn’t include 401k, medical, food or other fringe benefits.

dvtrn 5y ago
It doesn’t include 401k, medical Ahh interesting, I assumed it included things like bonuses and equity, but am surprised to learn 401k contributions are not considered TC. Is this the case even for matched contributions made by the employer? Meaning if I contribute x (money I was compensated already as a portion of salary), and employer contributes %/x (money the company effectively "gives" me), is that percentage not considered part of the "TC" terminology? OR am I exhibiting an unfortunate misunderstanding of 401k matches?
- potatolicious 5y ago
  It's a factor one ought to consider - but at the salary ranges that we're typically talking about and at the typical match levels most employers offer, including 401K contributions doesn't change the math much, so it's mostly not counted. For example, an employer who does a 1:1 match up to the IRS limit would be contributing at most ~$20K to your total comp, but when you're dealing with the rest of the package being in the $500K-1M range it tends to get glossed over.
- jandrewrogers 5y ago
  Matched contributions to 401k are generally not considered part of total comp because there is no implication that the match can be converted into cash immediately, though this is often the case. Similarly, HSA contributions by the employer usually are not counted as total comp even though it is a form of cash benefit. The rubric for all of these complicated and indirect forms of compensation is "benefits". These benefits are significantly limited in terms of practical cash value and rules around their use by regulation, whereas there is no bound on TC.