Benefits Glossary

A 401(k) match is when your employer contributes to your retirement account based on how much you contribute. For example, a '4% match up to 6%' means if you contribute 6% of your $80,000 salary ($4,800), your employer adds another $3,200 (4% of $80,000). This is effectively free money and is one of the most valuable benefits you can receive.

Education reimbursement (also called tuition assistance) is when your employer pays for some or all of your continuing education costs. This can include college courses, graduate degrees, professional certifications, or online courses. The IRS allows up to $5,250/year in tax-free education assistance.

Equity compensation gives you ownership in the company you work for. Common forms include Restricted Stock Units (RSUs), which vest over time and are worth their market value; Incentive Stock Options (ISOs), which let you buy shares at a set price; and Employee Stock Purchase Plans (ESPPs), which let you buy company stock at a discount. Equity can be extremely valuable at high-growth companies but carries risk.

A Flexible Spending Account (FSA) lets you set aside pre-tax dollars for eligible healthcare or dependent care expenses. Healthcare FSAs can be used for copays, prescriptions, dental, and vision. Dependent care FSAs cover childcare. The key benefit is the tax savings — contributions reduce your taxable income. FSA funds typically must be used within the plan year (use-it-or-lose-it).

Your health insurance deductible is the amount you must pay for covered healthcare services before your insurance plan starts to pay. For example, with a $2,000 deductible, you pay the first $2,000 of covered services each year. After meeting your deductible, you typically pay a copay or coinsurance until you reach your out-of-pocket maximum. Lower deductibles generally mean higher premiums.

Your health insurance premium is the monthly payment you make to maintain your health insurance coverage. This is paid regardless of whether you use healthcare services. Employers typically cover a significant portion of premiums — the average employer covers about 83% of individual coverage and 73% of family coverage. The employee portion is what you see deducted from your paycheck.

A Health Savings Account (HSA) is a savings account available to people enrolled in a High-Deductible Health Plan (HDHP). HSAs offer a unique triple tax advantage: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. Unlike FSAs, HSA funds roll over year to year and can be invested. Many employers contribute to employee HSAs as an additional benefit.

Parental leave is paid time off provided to new parents. It can include maternity leave, paternity leave, and adoption leave. The U.S. has no federal paid parental leave requirement, making employer-provided parental leave a significant benefit. Paid parental leave policies vary widely — from 0 to 26+ weeks — and represent substantial financial value for employees who plan to start or grow their families.

Paid Time Off (PTO) is a bank of paid days you can use for vacation, personal days, or illness. Unlike traditional systems that separate vacation and sick days, PTO combines them into one flexible pool. The value of PTO is directly tied to your salary — each day off is worth 1/260th of your annual salary (based on 52 weeks × 5 days). More PTO days means more flexibility and more dollar value.

A signing bonus is a lump-sum payment given to a new employee when they accept a job offer. It's often used to compensate for bonuses or unvested equity left behind at a previous employer, or to make an offer more competitive. Signing bonuses are typically subject to clawback provisions — if you leave within a certain period (usually 1–2 years), you may need to repay some or all of it. They are taxed as ordinary income.