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WalletPrep worksheet · Work and income

How to compare job offers

Name ____________________ Date __________

Key ideas

  1. Count the 401(k) match as pay. A 6% match on $66,000 is $3,960 a year, if you put in at least 6% and stay long enough to vest.
  2. Subtract what you'd pay for health insurance. Use your share of the monthly premium times 12. A plan that costs $100 more a month costs $1,200 a year.
  3. Price the commute and the hours. Gas, parking, transit and time all count. $200 a month of commuting is $2,400 a year before tax.

Vocabulary

Employer match
Money your employer adds to your retirement plan when you contribute, up to a set percentage of your pay.
Vesting
The rules for when your employer's contributions to your retirement plan become fully yours to keep if you leave the job.
401(k)
A retirement savings plan offered through an employer. Money comes straight from your paycheck, often with an employer match.

Work it out

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.

  1. Offer A salary
  2. 3% match
  3. Health premiums
  4. Commute
  5. Offer A full value
  6. Offer B salary
  7. 6% match
  8. Health premiums
  9. Offer B full value

Check yourself

  1. A job pays $60,000 with a 100% match up to 5%. If you contribute 5%, how much does the employer add each year?

    • A. $1,500
    • B. $2,500
    • C. $3,000
    • D. $6,000

  2. Which offer detail could make the matched money disappear if you leave early?

    • A. The vesting schedule
    • B. The deductible
    • C. The pay frequency
    • D. The job title

  3. Offer A pays $5,000 more, but its health premiums are $250 a month higher. Which is true?

    • A. Offer A is $5,000 ahead
    • B. Offer A is about $2,000 ahead
    • C. The offers are even
    • D. Offer B is ahead

Your turn

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.

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Answer key

How to compare job offers

Work it out

  1. Offer A salary$70,000
  2. 3% match$2,100
  3. Health premiums− $1,800
  4. Commute− $2,400
  5. Offer A full value= $67,900
  6. Offer B salary$66,000
  7. 6% match$3,960
  8. Health premiums− $600
  9. 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.

Check yourself

  1. C. $3,000 $60,000 × 5% = $3,000. A 100% match up to 5% adds $1 for every $1 you contribute, up to 5% of pay.
  2. A. The vesting schedule Vesting decides when the employer's contributions become yours. Leave before you vest and you can lose some or all of the match.
  3. B. Offer A is about $2,000 ahead $250 × 12 = $3,000 a year in extra premiums. $5,000 − $3,000 = $2,000, so Offer A is still ahead, by $2,000 before taxes.