How to compare job offers

Compare job offers on their full yearly value, not the salary line. Add salary and the 401(k) match, then subtract what you would pay for health insurance and the commute, and the offer with the higher number is often not the one with the bigger salary.

Start with a full-year number

Full yearly value = salary + employer retirement money + any bonus you can count on − your health premiums − work costs like commuting. Use the same method for both offers.

The match depends on you

A match only pays when you contribute. A "100% match up to 6%" means the employer adds $1 for each $1 you put in, up to 6% of your pay. Plan to contribute at least that much.

Vesting can take years

Your own contributions are always yours. For 401(k) matches, federal rules let an employer make you wait up to 3 years for full vesting, or use a graded schedule that reaches 100% after 6 years.

Health costs have two parts

The premium is what you pay every month. The deductible and out-of-pocket maximum are what you could pay when you get care. A cheap premium with a high deductible can cost more in a bad year.

Build a side-by-side table

List each offer in a column and these rows: base salary, expected bonus, 401(k) match, your yearly health premium, health deductible and out-of-pocket maximum, paid time off, commute cost and time, and any stipends like a home office or phone allowance.

Only count a bonus if it is contractual or has paid reliably. A "target bonus" of 10% that depends on company results is upside, not salary. Note it, but keep it out of the main total or count part of it.

Value the retirement benefits

Find the match formula and the vesting schedule in the benefits guide. A match of 50% up to 6% is worth 3% of salary. A 100% match up to 4% is worth 4%. Some employers also put money in no matter what you contribute; that is often called a nonelective or profit-sharing contribution.

If you expect to stay only a year or two, look closely at vesting. With a 3-year cliff, leaving at 2 years and 11 months means losing all the matched money. Your own contributions and their growth always go with you.

Value the health insurance

Your share of the premium comes out of each paycheck, usually before tax. Multiply the per-paycheck amount by the number of paychecks to get the year. For a family plan, the gap between two employers can be several thousand dollars a year.

Then compare risk. Add the yearly premium to the out-of-pocket maximum to see your worst-case year at each job. If one plan offers a health savings account (HSA) with an employer deposit, count that deposit as money in your pocket.

Count costs that come with the job

Commuting costs are paid after tax for most people, so they hit harder than they look. Add gas, parking, tolls, transit fares and wear on your car. A remote job may add a little to your utility bill, but usually saves far more.

Time is part of the cost too. An hour each way is about 10 hours a week, or about 500 hours a year with 50 working weeks. That doesn't go on the tape, but it belongs in the decision.

Then weigh what money can't measure

Once the numbers are close, the rest matters most: how much you'd learn, the manager, the stability of the company, the chance of a promotion and the hours expected. A job that leads to a bigger raise next year can beat a slightly richer offer today.

If you prefer one job but it pays less, use your table in a negotiation. Show the gap in full value and ask the employer to close it with salary, a signing bonus or something else on your list.