Explain My Paycheck

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Latest Questions

What is the average employer contribution to health insurance?

Employers typically contribute 73% of health insurance premiums for single coverage (averaging $6,200 per year) and 68% for family coverage (averaging $18,500 per year). This means the average employee pays about $2,500 annually for single coverage or $8,700 for family coverage through payroll deductions.

benefits compensation3 answers

What is a defined contribution vs defined benefit plan?

A defined contribution plan (like a 401(k)) lets you contribute up to $23,500 in 2026 with uncertain future benefits, while a defined benefit plan (pension) guarantees specific monthly payments in retirement based on your salary and years of service.

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How does a flexible work schedule affect my compensation?

Flexible work schedules typically don't change your base salary, but can save you $2,000-5,000+ annually in commuting, meals, and childcare costs while potentially affecting bonuses, overtime eligibility, and career advancement opportunities.

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What is a good annual bonus percentage?

A good annual bonus typically ranges from 10-20% of base salary for most professional roles, with individual contributors averaging 15% and managers averaging 20%. High-performing employees in finance, tech, and sales often receive 25-50% bonuses, while entry-level positions typically see 5-10% bonuses.

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How are RSUs taxed when they vest?

RSUs are taxed as ordinary income at their full market value when they vest. If 100 RSUs vest at $50/share, you owe income tax on $5,000 as if it were salary. Most companies withhold 22% federal tax automatically, but you may owe more at year-end if you're in a higher tax bracket.

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How do company car benefits work?

Company car benefits are taxable income based on the vehicle's fair market value. For a $30,000 company car, expect to pay roughly $1,800-3,600 in additional federal taxes annually, depending on your tax bracket and personal use percentage.

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How do employee referral bonuses work?

Employee referral bonuses are cash payments (typically $1,000-$5,000) for successfully referring candidates who get hired and stay employed for a specified period, usually 90-180 days. About 82% of companies offer referral bonuses according to Jobvite, with the bonus paid as taxable income on your regular paycheck.

benefits compensation2 answers

How do employee stock purchase plans (ESPPs) work?

Employee Stock Purchase Plans (ESPPs) let you buy company stock at a 5-15% discount through payroll deductions. Most plans have 6-month offering periods where you contribute up to 15% of salary ($31,500 max for 2026). You can often sell immediately for guaranteed profit or hold for long-term capital gains treatment.

benefits compensation3 answers

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