How to Compare Two Job Offers Properly

Two salaries are easy to rank and almost never the right basis for a decision. The only sensible way to compare two job offers is to convert everything each one provides — and everything each one costs you — into a single annual figure, then look at what is left over.

The number that matters is what lands in your account, adjusted for what you have to spend to live there.

Building one number to compare two job offers

Work through the components in the same order for each offer.

Start with base salary. Add the bonus at its expected value, not its maximum — if target is 15 percent and historical payout has been around 80 percent of target, use 12 percent. Add the employer retirement contribution, which is real money regardless of the vesting schedule.

Then subtract what you pay: health insurance premiums, which vary enormously between employers and are usually deducted pre-tax; parking or transit costs the employer does not cover; any required professional expenses.

Then adjust for tax. Two offers in different states can differ by several thousand dollars a year on identical gross pay, and the take-home pay calculator will show the difference by jurisdiction.

The job offer comparison calculator runs both offers side by side through the same sequence, which is the point — the method matters less than applying it identically to both.

Benefits are worth more than they look

The pieces people leave out are frequently the largest differentiators.

Retirement matching compounds. A 6 percent match on a $100,000 salary is $6,000 a year of free money, and the 401k match guide covers why matching is the highest guaranteed return available to most people.

Health insurance varies far beyond the premium. Compare deductible, out-of-pocket maximum, and whether your doctors are in network. A cheap premium with a $6,000 deductible is not cheaper for a family that uses healthcare.

Paid time off is compensation. Five extra days a year on a $100,000 salary is worth roughly $1,900 in equivalent hourly terms, and the PTO accrual guide covers how the accrual rules change what you can actually take.

Everything else — tuition support, professional development budget, parental leave, disability cover, life insurance. Price the ones you will use and ignore the rest honestly.

Equity needs discounting, hard

Stock compensation is where offers become incomparable if taken at face value.

Public company RSUs are the simplest: they have a market price, they vest on a schedule, and they are taxed as ordinary income on vest. Discount them for the vesting period and for the share price risk over that period, but they are real.

Private company options are a different instrument entirely. The strike price, the current valuation, the preference stack, the exercise window after leaving, and the probability the company ever has a liquidity event all matter. A headline "worth $200,000" figure carries none of that information.

A defensible approach is to value public equity at something close to face, discounted for vesting, and to value private equity as a lottery ticket you would be content to receive nothing from. If an offer only wins on private equity, it is not winning on compensation — it is winning on optimism.

Cost of living is not a percentage adjustment

Relocation between markets makes salary comparison meaningless until adjusted, and the standard adjustment is too crude.

Cost of living indices average across categories, and housing dominates the difference while everything else varies far less. A market that is 40 percent more expensive overall is often 80 percent more expensive on rent and about the same on groceries, insurance and everything you buy online.

So the useful adjustment is specific: price the actual housing you would take, in the actual area you would live, and treat the rest as roughly constant. The rent affordability calculator and the home affordability guide both handle that side, and the relocation cost calculator covers the one-time cost of getting there.

State income tax is a separate adjustment on top, and it is not small.

The commute is a real line item

An offer with a longer commute is an offer with lower pay and less time, and almost nobody prices it.

Twenty extra minutes each way is about 170 hours a year — more than four working weeks. At a $100,000 salary that time is nominally worth $8,000, and while your commute is not billable, it is time not available for anything else.

Then the direct cost: fuel, wear, tolls, parking, or transit fares. The commuting cost guide works through the full per-mile figure, which is consistently higher than people estimate.

Remote and hybrid arrangements are worth quantifying the same way rather than treated as a perk. Two days at home is roughly 40 percent of the commute cost and time back.

The things you cannot put a number on

Having built the comparable number, be honest that it is not the whole decision.

The manager matters more than most compensation differences over a two-year horizon. So does whether the role builds skills that raise your next offer, and whether the company is growing or contracting — the latter determines how many internal opportunities exist and how secure the job is.

Title and scope compound into future offers in a way that this year's salary does not. A role with more responsibility at slightly less pay frequently wins over three years.

The point of the arithmetic is not to make the decision. It is to know exactly how much the non-financial factors are costing or earning you, so the trade is explicit rather than rationalised.

Negotiating from the comparison

Once both offers are in one currency, the negotiation gets easier and more credible.

You can say precisely what the gap is and what would close it, and the specificity signals seriousness. It also lets you ask for the thing that is cheapest for the employer to give — a signing bonus, an extra week of leave, an earlier review date — rather than base salary, which is the most expensive and most constrained lever.

Whatever is agreed, get it in the written offer. Verbal commitments about future reviews and promotions do not survive a change of manager, and the severance guide covers the other end of the relationship, which is worth understanding before signing rather than after. For labour market and wage data by occupation and metro area, the Bureau of Labor Statistics is the cleanest public benchmark.