What Is Total Annual Compensation?
Your base salary is only part of what you actually earn. Total annual compensation (often called "total comp" or "TC") combines every form of pay into a single yearly number: your base salary, your cash bonus, the annualized value of stock or equity grants, and the cash-equivalent value of benefits such as a 401(k) match and insurance. This calculator turns a confusing offer letter into one comparable figure so you can evaluate jobs apples-to-apples.
How to Use the Calculator
Enter your annual base salary, your expected or target annual bonus, the total value of your equity grant, the vesting period in years, and the estimated annual value of your benefits. The tool annualizes the equity by dividing the grant value by the vesting period, then adds everything together and shows how each component contributes to your total.
The Formula Explained
The core equation is:
$$\text{Total Comp} = \text{Base Salary} + \text{Annual Bonus} + \frac{\text{Equity Value}}{\text{Vesting Years}} + \text{Benefits Value}$$
Equity is divided across the vesting period because a grant that vests over four years only delivers a quarter of its value each year. Spreading it gives a realistic per-year picture rather than overstating year-one earnings.
Worked Example
Suppose you have a $90,000 base salary, a $10,000 annual bonus, an $80,000 equity grant vesting over 4 years, and $12,000 in annual benefits. The annualized equity is \(\$80{,}000 \div 4 = \$20{,}000\). Total comp = $$\$90{,}000 + \$10{,}000 + \$20{,}000 + \$12{,}000 = \$132{,}000 \text{ per year}$$ Base salary makes up about 68% of that total.
FAQ
Should I use my target bonus or actual bonus? Use whichever you want to plan around — target for offer comparisons, actual for budgeting last year's real earnings.
Why divide equity by vesting years? A grant vests over time, so dividing reflects the value you actually realize each year and avoids overstating compensation.
What counts as benefits value? Employer 401(k) match, health/dental/vision premiums paid by the company, and other cash-equivalent perks. Use your best estimate of their annual dollar value.
