How to compare two job offers on total compensation

You have two offer letters and two different-looking packages. This guide shows you how to turn each one into a single yearly number you can compare side by side, and then how to use the difference to ask for more, without guessing at what the extras are worth.

Grab both letters, the benefits summaries and a sheet with two columns.

Why base salary alone can mislead you

Base salary is the number everyone quotes, but it is only part of what an employer spends on you. The Bureau of Labor Statistics (BLS) tracks the full cost. For full-time private-sector workers in June 2026, the average employer spent $54.00 for every hour worked. Pay itself was $36.97 of that (68.5 percent) and benefits were $17.03 (31.5 percent), according to the BLS Employer Costs for Employee Compensation release.

Put simply: for a typical full-time private-sector worker, benefits added nearly half as much again on top of the paycheck. Two offers with the same base can be thousands of dollars apart once you count them.

Not every benefit dollar is worth comparing, though. The BLS breakdown for full-time private workers for June 2026 splits that benefit cost like this:

"Legally required benefits" covers things like the employer's share of Social Security and Medicare. Almost every employer pays these, so they rarely separate two offers. Focus your comparison on the categories that do vary from one employer to the next: insurance, paid leave, supplemental pay and retirement.

One small change to note: BLS says that starting with its December 2026 data, the survey will no longer include workers' compensation costs, so future releases won't line up exactly with older ones.

Step 1: Put every cash element on a yearly basis

Start with the money you'll be paid, and convert everything to a 12-month figure.

• Base salary. If it's hourly, multiply by your expected weekly hours and by 52.
• Target bonus. Usually stated as a percentage of base. Multiply your base by that percentage to get the yearly target.
• Sign-on bonus. This is a one-time payment. Spread it over how long you expect to stay (over a two-year stay, count half of it each year), and check whether you'd have to pay it back if you leave early.
• Equity. Divide the total grant value by the number of vesting years. A grant vesting evenly over four years counts as a quarter of its value each year, on paper. (RSUs, or restricted stock units, are company shares you receive as they vest.)

Discount what isn't guaranteed

A target bonus is not a promise, and equity can lose value before it vests. Give each uncertain item a "realistic" value as well as its headline value.

For a bonus, ask the recruiter: "How has the bonus paid out against target over the last few years?" If you hear that it usually lands between 70 and 100 percent of target, use the low end. If the answer is vague, or the bonus is fully discretionary, count less or nothing.

For equity, ask about the vesting schedule, any cliff (a waiting period, often a year, before anything vests) and whether the shares are publicly traded. For a public company, a common approach is to knock off a slice to allow for the share price falling. For a private company, the shares may not be sellable for years, so many people count them at zero in the comparison and treat any payout as upside. Our company pay section covers how RSUs work in more depth.

Write down two numbers for each offer: guaranteed cash (base plus anything certain) and risk-adjusted cash (adding your discounted bonus and equity). If an offer only wins on risk-adjusted cash, you know you are betting on things outside your control.

Step 2: Value retirement contributions and the match

An employer 401(k) match is real money, but only if you put enough in to get it and stay long enough to keep it.

1. Read the formula. "100 percent of the first 3 percent" means the employer adds a dollar for every dollar you contribute, up to 3 percent of your pay. "50 percent of the first 6 percent" also tops out at 3 percent of pay, but you have to contribute 6 percent to get it.
2. Calculate the maximum match. Multiply the top match percentage by your base salary.
3. Check vesting. Your own contributions are always yours. The employer's match may vest immediately, gradually, or all at once after a set number of years. If you might leave before it vests, count it at zero for those years.
4. Note any other employer contributions. Some employers add a flat contribution or profit sharing whether you contribute or not. Count it the same way.

For context, the IRS set the 2026 employee contribution limit for 401(k), 403(b) and most 457 plans at $24,500, up from $23,500 for 2025, with a general catch-up limit of $8,000 for people 50 and over (IRS announcement). The IRS publishes the next year's limits each fall, so check for 2027 figures if your offer starts in the new year.

A pension (a defined benefit plan) is hard to value quickly. If one offer includes one, ask HR for the formula and vesting period, and treat it as a meaningful plus.

Step 3: Compare health premiums and out-of-pocket costs

Health coverage is often the biggest benefit gap between two offers, and it cuts both ways: a cheap premium can come with a high deductible.

Nationally, employers cover most of the premium. In March 2026, private industry workers in single coverage medical plans paid 20 percent of the premium on average, per BLS data on single coverage. For family coverage, workers paid 31 percent, per BLS data on family coverage. Your offers may be very different from those averages, especially if you need family coverage.

For each offer, pick the plan you would actually choose and fill in:

• Your premium share per paycheck, converted to a year.
• Deductible: what you pay before the plan starts sharing costs.
• Out-of-pocket maximum: the most you'd pay in a bad year for in-network care, not counting premiums.
• Employer HSA or HRA contribution, if any. This is money toward your costs, so subtract it.

Then work out two scenarios:

• Typical year: annual premium + what you'd normally spend on care, minus any employer HSA money.
• Bad year: annual premium + the out-of-pocket maximum, minus any employer HSA money.

If you or a family member has ongoing care, weight the bad-year number more, and confirm your doctors are in network for both plans.

Step 4: Put a value on paid time off and other benefits

Paid time off

Paid days off are paid days you don't work, so more of them raises what you earn per day worked. A simple way to price the gap:

1. Add up vacation, holidays and any floating or personal days for each offer. Count sick leave separately if it's a separate bank.
2. Find the difference in days.
3. Work out a daily rate by dividing the base salary of the offer with fewer days by 260 (52 weeks of five working days).
4. Multiply the daily rate by the day gap. That's roughly what the extra time off is worth.

With "unlimited" PTO, ask how many days people on the team actually take, and use that number.

Other benefits

Only count a perk if you would use it. Common ones worth a line in your sheet:

• Tuition or student loan help. Under IRS rules for 2026, up to $5,250 a year of employer educational assistance, including student loan payments, can be excluded from your taxable wages (IRS Publication 15-B).
• Commuter benefits. For 2026, the monthly tax-free limit is $340 for transit passes and vanpools and $340 for qualified parking.
• Dependent care. The annual dependent care assistance limit rose to $7,500 for 2026, from $5,000.
• Health FSA. For plan years starting in 2026, salary reduction contributions are capped at $3,400.
• Life and disability insurance, remote work stipends, equipment, and wellness money.

Value each at what it would cost you to buy or replace, not at the employer's headline figure.

Step 5: Adjust for location and taxes

Location

If both jobs are in the same metro, skip this. If one involves a move, the same salary can buy very different amounts.

The Bureau of Economic Analysis publishes Regional Price Parities, which compare price levels across states and metro areas against a national average of 100. Its latest figures, for 2024, put California at 110.7 and Oklahoma at 87.8, according to the BEA Regional Price Parities page. BEA lists the next release for December 10, 2026.

To adjust, divide each salary by its area's price parity and multiply by 100. The result is roughly what that salary would buy at national-average prices, so you can compare the two offers on equal terms. A parity above 100 shrinks a salary's buying power and one below 100 stretches it. State averages hide big differences between cities, so use the metro figure if BEA has one for your area. Our salaries by city section compares metros and covers states with no income tax on wages.

Taxes

A few tax rules change what lands in your pocket:

• Employer health coverage is generally excluded from your taxable wages, as are other benefits the law specifically excludes. IRS Publication 15-B explains that fringe benefits count as taxable pay unless a rule excludes them.
• Pre-tax payroll deductions such as traditional 401(k) contributions and premiums paid through a cafeteria plan lower your taxable wages, so a higher premium costs you a little less than its sticker price.
• Bonuses are usually withheld at a flat federal rate. The 2026 edition of IRS Publication 15 says the supplemental wage withholding rate remains 22 percent, rising to 37 percent on supplemental wages above $1 million in a year (IRS Publication 15). That's withholding, not your final tax bill; the true amount is settled when you file.
• State and local income tax varies a lot. If the offers are in different states, compare take-home pay using each state's own tax agency calculator or a paycheck tool.

How these rules affect you depends on your whole tax picture; if the decision is close, a tax professional can run the numbers.

A worked example, start to finish

Example (hypothetical): You're a single person choosing between two jobs in the same city. Neither company is real; the figures are made up to show the method. To keep the arithmetic readable, every amount in this example is in thousands of dollars per year.

• Offer A: base salary 95.0. Target bonus of 8 percent (7.6), which the recruiter says has typically paid out at about 75 percent of target, so you count 5.7. The 401(k) match is 100 percent of the first 4 percent (3.8), vesting immediately. Your share of the health premium is 1.2 a year, and you expect about 0.6 in copays. The out-of-pocket maximum is 3.5. You get 25 days off including holidays, plus tuition help you plan to use for a course costing 2.0.
• Offer B: base salary 104.0. No bonus. RSUs worth 48.0 vesting over four years with a one-year cliff, at a public company: 12.0 a year on paper, and you count 70 percent of it, or 8.4. The 401(k) match is 50 percent of the first 5 percent (2.6), vesting after three years. A high-deductible plan with a premium share of 3.0 a year and no employer HSA money; you expect about 1.0 in costs. The out-of-pocket maximum is 6.0. You get 18 days off including holidays.

PTO gap: 7 days. Offer B's daily rate is 104.0 ÷ 260 = 0.4, so the extra time off at Offer A is worth about 2.8.

What this tells you:

• Offer B leads by 9.0 on base salary, but once the match, health costs, time off and tuition are counted, its guaranteed lead shrinks to 0.8.
• Offer B pulls ahead by 3.5 on the risk-adjusted total, mostly because of equity that depends on a share price and on staying past the cliff.
• In a bad health year, Offer A costs you 4.7 (premium plus out-of-pocket maximum) and Offer B costs 9.0. If you expect heavy medical use, A looks stronger.
• Offer B's match doesn't vest for three years. If you might leave sooner, take 2.6 off B's guaranteed total, which puts it behind A.

The right choice depends on your appetite for risk and how long you plan to stay.

Turning the gap into a negotiation ask

Employers are often more flexible on salary or a sign-on bonus than on benefits, which are usually set plan-wide. So translate a benefits gap into a salary number.

Step 1: Pick the offer you'd rather take. Negotiate with that employer first.

Step 2: Size the gap. Use the line items, not a vague "the other offer is better." Remember that a higher base also raises a percentage-based match, so the raise you need is a little smaller than the raw gap.

Step 3: Ask for a specific number, slightly above the gap, so there's room to meet in the middle.

Step 4: Offer alternatives. If base is capped, ask about a sign-on bonus, an earlier review date, extra PTO days or an HSA contribution.

Script: asking an employer to close a benefits gap with salary

Fill in the brackets from your own sheet. Suppose you prefer Offer B's work but not its health plan:

"I'm excited about this role and I'd like to make it work. I've compared it line by line with another offer. Your base is higher, but your health plan would cost me about [typical-year gap] more in a normal year and up to [bad-year gap] more in a bad year, and there are [number] fewer days off. On guaranteed pay, the two offers end up very close. Could you bring the base to [your target] to cover the extra health costs? If base is fixed, an HSA contribution or a sign-on bonus would help close the gap."

In the example, the typical-year health gap is 2.2 thousand dollars and the bad-year gap is 4.3 thousand, so a target base of about 106.5 thousand would cover the typical gap with a little room to meet in the middle.

Script: asking the other employer to match a risk-adjusted total

If you prefer Offer A instead:

"Thank you for the offer. I really like the team and the benefits are strong. The other offer I have comes out about [gap] a year higher once I include their equity. If you could move the base to [your target], I'd be ready to accept."

In the example, the risk-adjusted gap is 3.5 thousand. Because a higher base also raises Offer A's 4 percent match, a raise of about 3.4 thousand would close it, so asking for a base of 99.0 thousand leaves some room to negotiate.

Keep it factual and calm. You don't need to name the other company, and decide in advance what you'll do if the answer is no. More scripts and timing advice are in our negotiation section.

Common mistakes to avoid

• Comparing headline equity to cash. A four-year grant isn't yearly pay, and it isn't guaranteed.
• Ignoring vesting. A generous match you lose by leaving at 18 months is worth nothing to you.
• Comparing premiums but not deductibles. The low-premium plan can be the expensive one.

What to do next

1. Ask both recruiters for the full benefits summary, the 401(k) match and vesting rules, the bonus payout history and the PTO policy in writing.
2. Fill in the two-column sheet above with your own numbers, using both a typical-year and a bad-year health cost.
3. Decide which offer you prefer if pay were equal, then size the gap and pick your ask.
4. Make one clear, specific request, with a fallback option, before the offer deadline.

The numbers won't make the decision for you, but they will stop a big base salary from hiding a smaller package, and they give you a fair, specific reason to ask for more.