Layered hybrid organic-inorganic perovskites (HOPs) have re-emerged as potential technological solutions for next generation photovoltaic and optoelectronic applications. Their two dimensional (2D) nature confers them a significant flexibility and results in the appearance of quantum and dielectric confinements. Such confinements are at the origin of their fascinating properties and understanding them from a fundamental level is of paramount importance for optimization. Here, we provide an in-depth investigation of band alignments of 2D HOP allowing access to carriers’ confinement potentials. 2D HOPs are conceptualized as composite materials in which pseudo inorganic and organic components are defined. In this way, computational modeling of band alignments becomes affordable using first-principles methods. First, we show that the composite approach is suitable to study the position dependent dielectric profiles and enables clear differentiation of the respective contributions of inorganic and organic components. Then we apply the composite approach to a variety of 2D HOP, assessing the impact on the confinement potentials of well and barrier thickness, of nature of the inorganic well and of structural transitions. Using the deduced potentials, we further discuss the limitations of the effective mass approximation, scrutinizing the electronic properties of this family of composite materials. Our simulations demonstrate type-I dominant band alignment in 2D HOP. Finally, we outline design principles on band alignment towards achieving specific optoelectronic properties. Thus, we present alternative theoretical methods to inspect the properties of 2D hybrid perovskites and expect that the composite approach will be applicable to other classes of layered materials.