Final answer:
After-tax compensation includes wages and tax-excludable benefits such as health insurance and retirement plans, which may compensate for lower wages. The total compensation package should be evaluated holistically. Renegotiation of salary may be possible depending on employment terms and policies.
Step-by-step explanation:
After-tax compensation typically includes wages received after taxes have been deducted. It also encompasses various benefits provided by an employer which may be tax excludeable. This means they are not counted as part of your taxable income. Some of these tax-excludable benefits can include employee insurance (mainly health), retirement plans, and employer payments to Social Security. In evaluating a compensation package, the total compensation per hour may include these benefits and can be seen as making up for lower pay, depending on the overall value of these benefits.
To determine if a total compensation package makes up for low pay, one would need to consider the value of all components of the package, such as supplemental pay, insurance, health benefits, retirement and savings plans, and legally required contributions. The question of whether wages potentially increase to compensate for employer's contributions to Social Security or reduce for their other payments is a matter of tax incidence, which explores who ultimately bears the cost of taxation.
Regarding the possibility of renegotiation after 6 to 12 months from the start of employment, this often depends on the employer's policies, the terms of the employment contract, and the negotiation power of the employee. It's a commonly discussed strategy during initial job offer negotiations to set a future date to discuss increases based on performance.