Job A pays $36,000 a year and offers no benefits. Job B pays $34,000 and includes health insurance and a retirement plan. Read only the two headline numbers and Job A wins by $2,000. Add up what each one actually gives you and the answer frequently reverses.
Why Headline Salary Is the Wrong Comparison
The salary is the most visible number on an offer and the easiest to compare, which is exactly why it gets used for a job it cannot do. It answers "what will they pay into my account" and not "what is this job worth to me", and those two questions have different answers whenever benefits are involved.
The gap is not marginal. Employer-paid health cover and a retirement contribution are both money — one covering costs you would otherwise pay, the other going into an account with your name on it. Leaving them out of the comparison does not make them worth nothing; it makes your comparison wrong.
The Method
- Write down the annual salary for each offer
- Add the value of anything the employer pays for that you would otherwise buy — health cover most often
- Add employer contributions to a retirement plan; this is money set aside for you, not a promise
- Add the cost of training or courses they will pay for, if the role genuinely includes them
- Add tuition assistance at the amount they will actually pay, after reading the conditions attached
- Subtract anything you pay for out of your own wages — your share of a health plan, for instance
- Compare the two totals, and note next to each one which figures you estimated
Seven steps, one sheet of paper. The last one matters more than it looks: an estimate you have labelled is a number you can revisit, and an estimate you have forgotten is an assumption.
Working the Example Through
Take the $36,000-with-nothing offer against the $34,000-with-health-and-retirement offer. The salary gap is $2,000 in favour of the first.
Now put figures on the second job's benefits. Whatever the employer-paid health cover is worth is money the first job leaves you to find yourself. Whatever goes into the retirement account is money the first job simply does not give you. It does not take much for those two together to exceed $2,000 — and if they do, the lower-salary offer is the higher-paying job, by the only definition that matters.
The point is not that the second offer always wins. It is that you cannot know which one wins until the benefits are in dollars, and the person who never does that arithmetic will systematically pick the offer with the loudest headline.
What This Method Deliberately Ignores
It ignores everything that is not money: what the work is, who you would learn from, how far you have to travel, whether the job leads anywhere. Those are frequently the more important questions.
The reason to do the money arithmetic properly anyway is that an unresolved money question distorts all the others. Somebody who suspects they are leaving $2,000 on the table will keep re-litigating the decision. Somebody who has worked it out and found the difference is smaller than it looked can then choose on the things that actually matter.
Before You Can Do Any of This
The arithmetic assumes you can name what each benefit is. If "retirement plan" or "tuition assistance" is still a phrase rather than a thing with a value, start with job benefits explained, which goes through the list one item at a time.
And when the offer becomes a payslip, the number you budget against is the net one, not either figure in this comparison — gross pay versus net pay covers why.