# How to compare job offers

> Add salary and the 401(k) match, subtract health premiums and commuting costs, then compare the totals side by side.

Source: https://www.walletprep.com/learn/compare-job-offers/ · Updated 2026-10-04 · Work and income

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.

## Key facts
- **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.

## A worked example: two offers, one winner
Leo has two offers for the same kind of role. Offer A: $70,000, 3% match, $150 a month premium, $200 a month commute. Offer B: $66,000, 6% match, $50 premium, fully remote.

- Offer A salary: $70,000
- 3% match: $2,100
- Health premiums: −$1,800
- Commute: −$2,400
- Offer A full value: = $67,900
- Offer B salary: $66,000
- 6% match: $3,960
- Health premiums: −$600
- Offer B full value: = $69,360

1. Offer A: match $70,000 × 3% = $2,100, premiums $150 × 12 = $1,800, commute $200 × 12 = $2,400. $70,000 + $2,100 − $1,800 − $2,400 = $67,900.
2. Offer B: the match is $66,000 × 6% = $3,960 and premiums are $50 × 12 = $600. $66,000 + $3,960 − $600 = $69,360.
3. Offer B is worth $69,360 − $67,900 = $1,460 more a year, before taxes, even with $4,000 less salary. Leo also gets back about 10 hours a week of commuting.

## Common mistakes
- **Comparing gross salary only.** Salary is the biggest line, but premiums, the match and commute costs can move the result by thousands. Put every line in yearly dollars before you choose.
- **Counting an unvested match.** If you are likely to leave before the match vests, that money isn't really part of the offer. Count only what you expect to keep.
- **Ignoring the worst-case health year.** A low premium can come with a high deductible. Add premiums and the out-of-pocket maximum for both plans so a bad year doesn't surprise you.

## Questions people ask
### How do I compare a salary job with an hourly job?
Turn hourly pay into a yearly figure. Multiply the hourly rate by the hours you expect a week, then by 52. At $30 an hour and 40 hours, that is $30 × 40 × 52 = $62,400. Count expected overtime separately.

### Is a higher 401(k) match worth a lower salary?
It can be. A match is extra pay that goes straight into retirement savings, and it is not taxed until you withdraw it. Compare full yearly value, and check that you would stay long enough to vest.

### Should I tell an employer I have another offer?
You can, if it is real. Share the facts briefly and say which job you'd prefer if the numbers were closer. It gives the employer a reason to improve its offer. Never invent an offer.

### How do I compare offers in different cities?
Add a row for the biggest cost differences: rent, state income tax and transportation. A higher salary in a city with much higher rent can leave you with less each month.

## Do this today
Make a two-column table for your offers with salary, match, yearly premiums and commute cost. Add and subtract to get each offer's full yearly value, then ask HR for anything you can't fill in.

## Sources
- [US Department of Labor: What you should know about your retirement plan](https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/publications/what-you-should-know-about-your-retirement-plan)
- [IRS: 401(k) and profit-sharing plan contribution limits](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits)
- [HealthCare.gov: Out-of-pocket maximum](https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/)

_General education, not personalized financial, tax or legal advice. Figures are examples. Check current rates and limits before you act._