Build a comparable year
Convert every recurring amount to an annual basis. Keep guaranteed pay separate from target bonus and discretionary benefits. A bonus with no written target should not be valued like salary.
| Comparison layer | Offer A | Offer B |
|---|---|---|
| Guaranteed gross cash | Salary plus fixed allowances | Salary plus fixed allowances |
| Estimated annual net | After employee deductions | After employee deductions |
| Employer value | retirement plan plus funded benefits | retirement plan plus funded benefits |
| Personal cost | Commute, meals, care | Commute, meals, care |
| Time cost | Hours plus commute | Hours plus commute |
Stress-test the bonus
Calculate the result at zero, half and full target bonus. If Offer B only wins at full bonus, the decision depends on bonus confidence rather than base compensation.
Use net monthly pay for affordability, guaranteed annual value for security and effective hourly value for lifestyle trade-offs.
Normalise the offer documents
Rewrite each offer into the same categories: guaranteed cash, variable cash, employer retirement contribution, insurance, paid time, work costs and conditions. Marketing labels such as total package or target compensation are not comparable until the components are separated.
Calculate three outcomes
Use a downside case with no discretionary bonus, a base case with the amount reasonably supported by written targets, and an upside case at full target. If the preferred offer changes between cases, identify the assumption carrying the decision.
Value time and location
Add weekly working hours and commuting time, then divide annual net pay by annual hours. For remote or hybrid work, include home-office cost and the actual number of required office days. A role paying $500 more per month can have a lower net hourly value after travel and longer hours.
Score benefits without pretending they are cash
| Benefit | Useful value | Do not use |
|---|---|---|
| Medical coverage | Expected replacement cost or avoided premium | Employer's headline insured limit |
| Extra leave | Daily pay value plus personal utility | Full salary as extra cash |
| Training | Course you would buy and can use | Unused budget ceiling |
| Equity | Separate risk scenario | Guaranteed cash value |
Check the employment conditions
- Probation salary and benefit differences
- Bonus eligibility date and resignation treatment
- Notice period, repayment clauses and restrictive terms
- Location, travel and schedule requirements
- Written review cycle and salary-adjustment process
Write the decision in one paragraph
State which offer wins on guaranteed annual value, expected monthly net, hourly value and career fit. Then name the two assumptions most likely to change the answer. This makes the trade-off explicit and gives you a focused list of questions for the employer.
Price the transition
A new offer can create a gap between final pay from the old employer and first pay from the new one. Add forfeited bonus, repaid training costs, unused leave treatment, moving cost, equipment and the waiting period for medical coverage. A strong annual offer can still require a short-term cash buffer.
Test promotion value separately
Title and responsibility can improve later earning power, but that value is uncertain. Write a separate career case: skills gained, decision authority, marketability and evidence the role will provide. Do not inflate current compensation to include a hoped-for future salary.
Ask questions that change the model
- Which payments are contractual and which are discretionary?
- How was the target bonus paid in the last completed cycle?
- What employee costs are reimbursed?
- When do benefits and salary review begin?
- What schedule or travel conditions are mandatory?
Set a decision date and evidence grade
Mark every input as written, verified verbally or assumed. Give uncertain items a downside value. Set the date by which missing answers are needed and preserve the final offer documents. A comparison becomes unreliable when one offer uses signed terms and the other uses optimistic assumptions supplied informally.
Work through a two-offer decision with uncertainty visible
Suppose Offer A has lower monthly salary but a shorter commute, written bonus formula and confirmed medical coverage. Offer B has higher salary, longer expected hours and a verbal target bonus. Do not force every item into one optimistic total. Build three outputs for each offer: guaranteed annual cash, expected annual value using documented assumptions, and estimated monthly net pay.
Next, price the time commitment. Add expected working hours and commute time for the same twelve-month period. Divide estimated annual net pay after work-specific cash costs by those hours. This does not decide which job is better, but it exposes when a higher monthly amount depends on materially more time.
| Input | Evidence grade | Conservative treatment |
|---|---|---|
| Basic salary | Signed or written offer | Include for the stated eligible period |
| Target bonus | Plan terms and performance history | Show zero, partial and target scenarios |
| Insurance | Benefit schedule and eligibility date | Value the relevant replacement cost, not the policy limit |
| Working hours | Written schedule plus verified expectations | Use the longer supported estimate |
| Commute | Required office days and actual route | Include time and direct recurring cost |
Write the final decision in one paragraph: which offer wins on guaranteed cash, which wins on expected value, what assumption could reverse the result, and what non-financial factor remains decisive. Preserve the offer documents and calculation version. After joining, compare the first three complete payslips and benefit enrolment with the model so the next decision uses evidence rather than memory.