How to Compare Two Job Offers
To compare two job offers fairly, add up everything each employer gives you per year (base, guaranteed bonus, retirement match, and benefits) and subtract what each job costs you per year (your share of health premiums, commuting, and other recurring costs). Compare the net figures, not just the base salaries.
Base salary is only the headline
The offer with the bigger base is not automatically the better deal. A slightly lower salary with a strong retirement match, cheaper health coverage, and a shorter commute can easily come out ahead once everything is counted.
Net = (Base + Bonus + Retirement + Benefits) − (Health premium + Commute + Other costs)
What to add up on each side
Compensation (money in)
- Base salary — the guaranteed annual figure.
- Guaranteed bonus — count only what is contractually guaranteed; treat discretionary bonuses conservatively or leave them out.
- Employer retirement contribution — a match is real compensation, even though it is not spendable today.
- Other recurring benefits — stipends, allowances, or perks with a clear cash value.
Costs (money out)
- Your health premium — the part you pay, not the employer’s share.
- Commute — fuel, transit, parking, or the cost of extra time.
- Other recurring costs — relocation-related expenses, required equipment, and similar.
A worked example
Two offers, entered as annual figures:
- Offer A: $90,000 base + $5,000 bonus + $4,500 match − $2,400 premium − $3,000 commute = $94,100 net
- Offer B: $95,000 base + $2,850 match + $500 benefits − $1,200 premium − $6,000 commute = $91,150 net
Offer B has the higher salary, but Offer A is ahead by about $2,950 a year once everything is counted — roughly $246 a month before tax.
Compare two offers side by side →
What the numbers cannot tell you
A net-compensation comparison is a starting point, not the whole decision. It cannot weigh growth potential, job security, the quality of the team, learning opportunities, flexibility, or how the role fits your life. Use the arithmetic to remove the guesswork about money, then judge the rest deliberately.
Note too that this kind of comparison is before tax. Tax outcomes depend on filing details and location, so comparing gross figures keeps both offers on equal footing.
Common questions
Should I take the job with the higher salary?
Not automatically. Compare total compensation minus total costs. A lower base can win once benefits and commuting are included.
Should I count an employer 401(k)-style match?
Yes — a match is genuine compensation. Keep in mind it is not spendable today, so weigh it alongside cash if near-term income matters to you.
How do I compare offers in different cities?
Fold the cost differences you can quantify — commuting, and any recurring costs — into the comparison, and consider broader cost-of-living differences separately when you weigh the non-financial factors.
Sources & methodology
The math in this guide matches the formulas documented on our How We Calculate page, where the calculators are also tested. This guide is educational and is not payroll, tax, legal or financial advice.