Reading a Job Offer: What Your Salary Package Includes

A job offer arrives, and somewhere in the email is the number you've been waiting for. Then you notice the words beside it, "plus super" or "including super" or "total package", and it's no longer clear how much you'll actually be paid.

Those few words can move your pay by thousands of dollars a year. Once you know what each number covers, two offers that look hard to compare can be lined up in a few minutes.

The three numbers in an offer

Most offers quote at least one of three numbers, and each covers something different.

Base salary is your pay for the year before tax. It's the number your fortnightly or monthly pay is worked out from, and the only part you'll be able to spend. Our guide to average salaries explains which comparisons are useful at the start of your working life.

Super is the money your employer pays into your super fund for retirement, on top of your pay. The minimum is 12% of eligible pay, usually the base salary in a salaried job.

Total package, also called a salary package or total remuneration package (TRP), is the two added together, along with any benefits the employer pays for, such as a car or a phone plan.

An offer that says "$70,000 plus super" is quoting base salary, and super comes on top. An offer that says "$75,000 including super" or "$75,000 package" is quoting the total, and super comes out of it before you see your share.

Turn a package into base salary

When super is included in a package, the package is your base salary plus 12% of it. So to find the base salary, divide the package by 1.12.

A $75,000 package that includes super is $75,000 ÷ 1.12, a base salary of about $66,964. The other $8,036 or so is the employer's super contribution. If a package also includes other benefits, take their value off first. Use the employer's actual super rate if it exceeds 12%.

Compare offers by what lands each fortnight

Here's a made-up example. Mia has two offers for similar graduate roles. One is $70,000 plus super, the other is a $75,000 package including super. The second looks bigger.

Mia would take home about $80 a fortnight more with the $70,000 offer, and get more super too, because the $75,000 already has her super inside it.

Comparing on fortnightly pay also helps with everything after the offer. That's the number your rent, bills and savings come out of. Our guide to take-home pay explains each deduction between your salary and your account, and the take-home pay calculator gives an estimate for any salary.

We are building Clova, a budgeting app that gives each pay a plan for bills, spending and goals.

Check what the salary is meant to cover

Two offers with the same base salary can still be different jobs. A few lines in the offer or contract are worth reading closely. Our guide to annual leave and leave loading explains what to look for in holiday pay.

• Hours and extra pay. Some salaries are set to cover overtime, weekend work or allowances. If an award covers the job, the salary needs a valid arrangement covering its entitlements for your actual hours; the arrangement determines how it is checked. Fair Work explains how annualised salaries are checked. Our guide on award and penalty rates helps you find which award applies.
• Bonus. A bonus described as discretionary or based on performance may not be paid. It's safer to plan around the base salary and treat any bonus as extra.
• Salary packaging. Some employers let you swap part of your pay for benefits paid before tax, such as extra super or a car. That lowers your cash pay in exchange for the benefit, so it's a separate choice from the offer itself. The ATO's page on salary sacrificing explains how it works.
• How often you're paid. Weekly, fortnightly or monthly pay changes how you plan. A monthly salary means a longer stretch between paydays at the start.

Every offer, whatever its wording, has to meet the minimum pay for the job under its award or agreement, or the national minimum wage if neither applies. Our guide to the minimum wage shows what that is per week and per fortnight.

Ask for the breakdown before you sign

You don't need to work any of this out alone. Asking the employer to put the base salary, super and any bonus terms in writing as separate lines is an ordinary request, and it's often how a negotiation starts. Once the offer is accepted, our guide to super for your first job explains where the super goes and how to choose a fund.

Checking the breakdown gives you a clearer starting point for your first pay.

A note from us

An offer can leave you with questions. Asking for the pay breakdown before signing is an ordinary part of understanding the job.