Job offer glossary: 20 terms every career starter should know

Auto-enrolment

The law requiring your employer to put you into a workplace pension automatically. You can opt out, but doing so means turning down the employer contribution — free money you'd be walking away from.

Base salary

Your fixed annual pay before bonus, overtime or benefits. It's the number in the headline, and the one most people over-focus on when comparing offers.

Benefit in kind (BIK)

A non-cash perk from your employer that HMRC treats as taxable — a company car or private medical insurance, for example. You don't receive cash, but you pay tax on its value.

Bonus (discretionary vs contractual)

A discretionary bonus is paid at the employer's choice and may not arrive at all. A contractual bonus is owed to you if the stated conditions are met. The difference matters enormously when valuing an offer.

Car allowance

Cash paid on top of salary instead of a company car. It's taxed as ordinary income, and it usually isn't pensionable.

Critical illness cover

Insurance paying a tax-free lump sum if you're diagnosed with a serious condition on the policy's list. Some employers provide it as a benefit.

Death in service

Life cover your employer pays for, typically worth 2 to 8 times your salary, paid to your family if you die while employed. Remember to complete the nomination form.

Employer pension contribution

The percentage of your salary your employer pays into your pension. The legal minimum is 3%; good schemes pay 8% or more. It's one of the biggest hidden differences between offers.

Equity / share options

A stake in the company, usually as options to buy shares at a fixed price later. Common at startups. Worth something only if the company grows — and only after vesting.

Flexible working

Any arrangement giving you control over when or where you work. Ask what the pattern is in practice rather than what the policy says.

Gross vs net pay

Gross is what you earn before deductions. Net is what actually reaches your bank account after tax, National Insurance and pension. The gap surprises almost everyone on their first payslip.

Income protection

Insurance paying a portion of your salary — often 50 to 75% — if illness or injury stops you working long-term. Far more valuable than most people realise.

National Insurance (NI)

A tax on earnings that funds the State Pension and other benefits. Employees pay 8% on earnings between £12,570 and £50,270, and 2% above that.

Notice period

How much warning you must give before leaving, and your employer before ending your employment. Check it before accepting — a three-month notice period limits how fast you can move.

Probation period

An initial stretch, often three to six months, with reduced notice on both sides. Some benefits don't start until you've passed it, so check which.

Pro rata

Proportional to the hours worked. A part-time role advertised at £30,000 pro rata pays a share of that, not the full amount.

Salary sacrifice (salary exchange)

Swapping part of your cash salary for a pension contribution, reducing the tax and National Insurance you pay. The name is misleading — nothing is being sacrificed.

Statutory vs enhanced

Statutory means the legal minimum, whether that's sick pay, maternity pay or holiday. Enhanced means your employer pays more than the minimum, which can be worth thousands.

Tax code

The code telling your employer how much tax-free income you're entitled to. 1257L is the most common. If yours looks wrong, check it — errors can cost hundreds a year.

Vesting

The schedule by which equity becomes genuinely yours. A common structure is four years with a one-year cliff, meaning you get nothing if you leave in the first twelve months.

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