So, what do you do? Here, we’ll explain the financial perks and other benefits to consider when comparing job offers. This way, you can prioritize what’s most important to you—before signing on the dotted line.
Three money perks to keep in mind for your first job
Employment can offer many different kinds of financial benefits. Although salary is often the first one we think of when starting a job hunt, other perks can add to your total earnings. Here are the top three financial incentives to consider that can make a big impact on your life.
1. Bonuses and commissions
On top of your base salary, you may be presented with different bonus offers. This may include a signing bonus when you first start with the company or a performance-based, year-end bonus. Some organizations offer referral bonuses to employees who refer another person for a role with the company, typically upon their hiring. The size of a company bonus could be tiered and increase with seniority or years of service.
If you want to work in sales, consider commissions. If you’re really good at meeting sales quotas, you could earn some serious income on top of your base salary. With all your hard work, you could also receive a financial reward for hitting a sales goal.
2. Company pension
If you’re lucky enough to find a job that comes with a company pension, it’s definitely worth looking into. Company pensions usually take the form of a defined benefit (DB) pension plan or a defined contribution (DC) pension plan. With a DB plan, you’re guaranteed a certain amount of income in retirement based on your average salary and years of service with the company. However, DB plans are not very common anymore. Most employers offer a DC plan. With a DC pension, you are not guaranteed a specific amount in retirement, because the benefits are based on the amount you contribute and your investment returns.
One day, you may be faced with a dilemma: choosing between a job that pays a higher salary and one that has a lower salary but offers a pension. You may initially think the former is the better option. However, remember that a pension can help you achieve and maintain your dream lifestyle during your golden years.
3. Group investment accounts and employer matching programs
Some employers offer access to a group registered retirement savings plan (group RRSP) or a group tax-free savings account (group TFSA), which you can use to save and invest on a tax-free or tax-deferred basis. You can decide how much you want to contribute to the account and even have the money come directly off your paycheque. And if you retire or leave the company, you’ll be entitled to your account balance, which includes your contributions and any investment growth. Just keep in mind that group RRSP and group TFSA contributions also count towards your RRSP and TFSA contribution limits.
If the company you want to join is listed on a stock exchange, there may be an opportunity to become a shareholder. For example, you might be able to buy company shares through an employee stock purchase plan (ESPP). As with a group RRSP or group TFSA, you can decide the amount to contribute. If you receive dividends from your investments, those can be reinvested in your ESPP account.