How to Compare Two Job Offers

Two offers in hand is a good problem to have. The trick is making them comparable. A higher salary can be eaten up by longer hours, pricier health insurance, or a long commute.

Step 1: Put every offer on the same basis

Write down, for each offer:

• Base pay (salary or hourly rate)
• Expected hours per week, including the unofficial ones
• Bonus or commission, and how likely it really is
• Retirement match (for example, "100% match up to 4% of pay")
• Your share of health, dental, and vision premiums
• Paid time off and holidays
• Commute distance and days in the office
• Any stipends: phone, internet, education, remote work

If something isn't in the offer letter, ask. "Could you share the employee cost of health coverage?" is a normal question.

Step 2: Find the effective hourly rate

Salary tells you what you'll earn. Hours tell you what it costs you.

Effective hourly rate = annual pay ÷ (real hours per week × 52)

A $58,000 job that runs 45 hours a week pays $24.79 an hour. A $54,000 job at 40 hours pays $25.96 an hour.

Step 3: Add the money that isn't in the salary

• Retirement match: match rate × salary. A 5% match on $54,000 is $2,700 a year.
• Bonus: count it only if it's reliable. A "target" bonus isn't a guaranteed one.
• Stipends: add them at face value.

Step 4: Subtract what the job costs you

• Health premiums: your monthly share × 12.
• Commuting: miles per day × workdays × your cost per mile, plus parking and tolls.
• Required spending: uniforms, tools, or licenses you pay for.

Worked example

The commute figures assume 230 workdays for Offer A (11,500 miles) and three office days a week for 46 weeks for Offer B (2,760 miles). Use your own car costs; gas, maintenance, and depreciation vary a lot.

Offer A pays $4,000 more on paper. After benefits and commuting, Offer B comes out about $1,082 ahead, with 5 more days off and 5 fewer hours a week.

This comparison leaves out taxes for simplicity. Because premiums are often paid pre-tax and the match isn't taxed now, the after-tax gap can shift a bit. To check, run each salary through the Take-Home Pay Estimator.

Step 5: Weigh what doesn't fit in a spreadsheet

Numbers settle a lot, but not everything:

• Growth: Which role builds skills you'll be paid for later?
• Stability: How secure is the company and the team?
• Schedule: Fixed hours, shift work, on-call, travel?
• Flexibility: Remote days, and how firm they are
• Manager and team: You'll spend a lot of hours with them

A useful exercise: if both offers paid exactly the same, which would you choose? If the answer is clearly one of them, ask yourself how much extra pay it would take to switch.

Step 6: Negotiate with the comparison in hand

If you prefer the offer that pays less, you have specific numbers to work with. You might ask for a higher base, a signing bonus to offset a lost bonus, an extra week of PTO, or more remote days. Keep the request concrete and tied to the gap you calculated.

Common questions

Should I compare gross or net pay?

Start with gross to keep it simple, then check net pay for each offer, especially if one involves moving to a state with a different income tax.

How do I value paid time off?

Divide the salary by 260 workdays to get a daily rate. At $54,000, each day off is worth about $208, so five extra days is roughly $1,040 of paid time.

What if one offer is hourly and one is salaried?

Convert the hourly offer to yearly pay with realistic hours, including overtime if it's regular and reliable, then compare effective hourly rates.