The offer with the bigger salary is not always the better offer. A fair comparison turns each offer into a yearly figure of money you actually keep, then adds what the extras are worth.
Step one: convert each salary to take-home pay
Put each gross salary into the calculator for the right country or state. Use the same pay period for both, and include any pension contribution you would make. Now you are comparing money in the bank, not the headline numbers. Differences in state or regional tax can make a surprising difference to the result.
Step two: add the value of the extras
Benefits that save you money are worth something. Make a list and give each a rough yearly value:
- Employer pension or retirement contributions, which are part of your pay even though you never see them in your account.
- Health, dental or life insurance paid by the employer.
- Paid holidays and sick leave: more paid days off is worth a share of your daily pay.
- Bonuses, but only count what is guaranteed or very likely.
- Training, a phone, a car or a free meal, if you would otherwise have to pay for them.
Step three: subtract the cost of the job
Count what it costs you to do the job: commuting, parking, childcare, clothing or equipment, and the cost of living in the area. A job that pays more but needs a long and costly commute can leave you with less money and less time. Use real numbers rather than guesses, and include the cost of your time if the commute is long.
Step four: think about the future
Look at where each job is likely to go in two or three years. Is there room for raises and promotion? Is the company stable? Does the role teach skills that make you more valuable? A smaller offer with strong prospects can be worth more than a larger one that goes nowhere. These things do not fit in a calculator, but they belong in the decision.
Step five: use a simple table
Put the two offers side by side in a table with rows for take-home pay, employer benefits, extra days off, cost of working and growth. Seeing the numbers in a column makes the difference clear. If the offers are close, let the non-money factors decide: the team, the work itself and how you feel after the interviews.
Negotiating
If you prefer one offer, you can ask for more. Employers often have room on salary, a signing payment, start date, extra holiday or training budget. Ask politely, give a reason and use the take-home figures to show what the difference means to you. A clear, friendly request is received better than an ultimatum.
Calculators for this guide
More tips
- How to Read a Payslip, Line by Line
- Hourly, Weekly, Monthly or Yearly: Converting Pay Without Mistakes
- Marginal and Effective Tax Rates: Why a Pay Rise Never Costs You Money
- Retirement Contributions and Take-Home Pay: Before Tax or After?
- Why Your Real Payslip May Differ From an Online Estimate
- Bonuses and Overtime: Why They Seem to Be Taxed More
- How to Build a Budget From Your Take-Home Pay
- States With No Income Tax: What That Does and Does Not Mean
- Moving for a Job: Will You Really Be Better Off?
- Self-Employed? How Much Should You Set Aside for Tax
- Asking for a Raise: Using Take-Home Numbers to Plan the Conversation
- Student Loan Repayments and Your Take-Home Pay
- A Yearly Tax Check-Up in Thirty Minutes
- All tips and guides
These guides are general information and estimates to help you plan. They are not tax advice. Rules and rates change, so check the official tax authority for your country.