I am a salaried manager working in the United States. Due to job duties and industry practice my weekly salary is based on two parts to form what we in call in the industry the "total package". We use this phrase because we use this number to compare offers between employers (there is high probability that you will work numerous companies over your career in my industry).
The two parts are:
- Typical compensation (taxable, reported) = A
- Per-Diem (non-taxable, not reported) = B
So, to arrive at the "total package" one simply adds the two... A+B=C
Recently, the amount of Per-Diem paid per week was increased. No annoucment was made of this change, and the only reason I noticed was because the amount of my paycheck was greater than the previous week. I asked the office manager (who submits the payroll) about the change, and she told me that "it came from corporate" (meaning that it was decided this was to happen, no questions asked, no explanations given). In my opinion, since Per-Diem is based on the cost of living, the increase was given for this reason.
After reviewing my pay stub I noticed that my "total package" had remained unchanged. To me this makes no sense. In theory I am now making less because my "salary" (A) is now less. However, in practice I am netting more per week because less is being taxed.
It amounts to (A-X) + (B+X) = C
I my mind if a cost of living increase is determined my "total package" should increase... A+B+X=C+X
My question is: Does my reasoning make sense, and how can I approach my supervisor about it?