How to compare two job offers properly

An offer of $95,000 and an offer of $105,000 are not ten thousand dollars apart. They may not be apart at all, and the higher one may be worse.

Salary is one line in a compensation package, and the other lines routinely swing the comparison by more than the salary gap. This guide shows how to put two offers on the same footing.

Start with total cash

Base salary is the floor. Add everything else that arrives as money:

• Signing bonus, amortised over how long you expect to stay. Check the clawback. Most require repayment if you leave within a year or two, which makes the bonus a loan until then.
• Target annual bonus. Discount it by how reliably it pays out. A “15% target” at a company that has paid 15% for five years is worth far more than the same target at a company that pays it when the quarter allows. Ask what it has actually paid for the last three years. The answer, or the refusal to answer, is informative.
• Commission, at a realistic attainment rate instead of the plan number.
• Guaranteed overtime or shift differentials, if the role has them.

Then the 401(k) match, which is larger than people think

The match is straight cash, and people routinely underweight it because it doesn’t appear in the offer headline.

• 6% match on $95,000 = $5,700
• 3% match on $105,000 = $3,150

That is $2,550 of the $10,000 gap gone, before tax.

Check the details, because they vary and they matter:

• Formula. “100% of the first 6%” is very different from “50% of the first 6%”, which is a 3% match.
• Vesting. Immediate vesting is worth substantially more than a four-year cliff. If you leave before vesting, the match was never yours.
• Eligibility date. A twelve-month wait costs you a full year of match.
• True-up. Without one, front-loading your contributions can cost you match.

Health insurance, where the swings are biggest

This line is the most likely to reverse a comparison, and people examine it least.

Compare:

• Your premium share, per pay period, for the coverage you actually need. Family coverage differences of $300 a month are common, which is $3,600 a year.
• The deductible and out-of-pocket maximum. A low-premium high-deductible plan can cost more in a year you actually use it.
• HSA eligibility and employer contribution. An employer putting $1,500 into an HSA is $1,500, and HSA money is triple tax-advantaged.
• Whether your doctors are in network. That isn’t a number, but it becomes one.

Premiums are usually pre-tax, so a $3,600 premium difference is worth more than $3,600 of salary. It comes off before tax at your marginal rate.

State tax, if the offers are in different states

A move changes your take-home substantially, in either direction.

Nine states levy no income tax on wages. Others take 5-10% or more. On $100,000 that is a swing of five to ten thousand dollars, which dwarfs most salary negotiations.

Don’t stop at income tax, though. States with no income tax generally raise revenue elsewhere, through property tax and sales tax, and the real determinant is usually cost of living, housing above all. A $105,000 offer in a city where rent is 60% higher is a pay cut in every way that matters.

Compare take-home in each state on the paycheck calculator, then adjust for what housing actually costs where you would live.

Equity, discounted honestly

Offers most often oversell equity.

Public company RSUs are close to cash. They vest on a schedule, they are taxed as ordinary income at vest, and you can usually sell immediately. Value them at the current share price, divided across the vesting schedule, discounted for the risk of leaving before vesting.

Private company options are lottery tickets with a strike price. The “$200,000 of equity” in an offer letter is a number the company chose. It is worth nothing unless there is a liquidity event at a valuation above your strike price, after your preferences, within a timeframe you can wait out. Many are worth exactly zero.

If you include private equity in a comparison, discount it heavily (most people who have been through it would say 80-90%) or treat it as upside and not compensation.

Also check the exercise window. A 90-day post-termination window means leaving requires buying your options, in cash, with a tax bill attached.

Time, which is money

• Paid time off. A day is worth roughly salary ÷ 260. On $100,000 that is $385 per day. Fifteen days versus twenty-five is nearly $4,000.
• Holidays. Companies range from 6 to 15 or more.
• Parental leave. If relevant, the difference between twelve paid weeks and two is enormous.
• Actual hours. A $105,000 job at 55 hours a week pays less per hour than a $95,000 job at 40. Ask people who work there, not the recruiter.
• Commute. An hour each way is 500 hours a year, or twelve unpaid working weeks, plus fuel, tolls or fares.

Putting it together

Build both offers into an annual figure and compare like with like:

The $10,000 salary gap has vanished, and that is before state tax, cost of living, or the things you cannot put a number on.

The things that are not numbers

They decide more than the money does, and they are worth naming explicitly:

• Whether the work is something you want to be better at in two years
• Who you would report to, which is the single best predictor of whether you stay
• Whether the company is growing, flat or quietly shrinking
• Remote, hybrid or in-office, and whether that is stated policy or current mood
• Job security, and what the last two years of headcount did

A 5% salary difference is recoverable in one negotiation. A bad manager costs you a year.

The process

1. Get both offers in writing, with benefits documentation and not a summary.
2. Build the table above for each.
3. Compare take-home, not gross, especially across states.
4. Discount anything uncertain: bonus by payout history, private equity heavily.
5. Price the time: PTO, hours, commute.
6. Then weigh the non-numbers, which is where the decision usually is.

The offer comparison calculator does the cash arithmetic side by side, and the paycheck calculator handles the state-by-state take-home. What they do and do not model is on the methodology page.