How Much Is Your Job Compensation Package Really Worth?

Posted On Apr 10, 2020 By admin With Comments Off

When marketing analyst Kirstin Stone received a job offer in 2018, she first turned it down, although it included a 20% repay raise.

Two a few months later, she reconsidered after comparing the total compensation package to her current job.

“That 20% wasn’t enough to pull me over the first time, ” Stone says. “A fortune was decided in large fraction due to benefits.”

With the unemployment rate sinking below 4 % for more than a year, firms “re gonna have to” do more to woo works. That necessitates benefits are becoming as invaluable as a paycheck, according to Alison Norris, an advice strategist for SoFi.

Trying to figure out what your compensation package is worth compared to another job offer? We’re here to help you add it all up.

7 Factors to Consider When Evaluating a Compensation Package

When you get a job offer, your first impulse is probably to look at that payment digit. But benefits account for 37.7% of an employee’s total compensation, according to the Bureau of Labor Statistics.

“Compensation encompasses so much more than really salary, ” Norris said. “Choosing its own position[ because of] your overall compensation is often used to be far better financially advantageous than focusing on the one that merely has the higher base salary.”

But how do you compare the number on a paycheck to benefits like paid dental insurance? Now are seven areas to consider when evaluating enterprise offers.

1. What’s Your Base Pay?

If you’re looking at compensation packages, be sure you’re looking at analogous dollar extents, Norris advised.

“If you’re having trouble and actually want to compare apples to apples, looking at your hourly rate — even if you’re salaried — is often easier, ” said Norris, who was also indicated that hiring bonuses should be included when calculating the base pay.

Select its own position[ because of] your overall compensation will often be far more financially advantageous than concentrates on the one that merely has the higher base salary.

And if you’re comparing a freelance position to a staff one, don’t forget to factor in employer contributions and taxes you’ll owe as an independent contractor, Norris warns.

“If one plight is a W2 stance and the other is an independent contractor, you are able to supplemented in the taxes your bos would offer on your behalf, which can be huge, ” Norris says. “Employers pay 7.65% of your income in social security and medicare taxes.”

2. Factor in Paid Time Off

One way to designate a dollar appraise to paid time off is to incorporate it into your hourly rate.

advertising analyst

Multiply the total number of hours in your work year by your bribe proportion, then divide that number by total work hours you’ll actually succeed by subtracting the pay time off.

For instance, the number of workday hours per year for a 40 -hour workweek is approximately 2,080 hours( 40 x 52 ).

If Job A offers $20/ hour and a few weeks( 40 hours) of paid time off, calculate $20 x 2,080= 41,600/( 2,080- 40= 2,040)= $20.39/ hour.

If Job B offers $19/ hour and three weeks( 120 hours) of paid time off, calculate $19 x 2,080= 39,520/( 2,080- 120= 1,960)= $20.16/ hour.

Don’t forget to include paid vacations, voluntary periods and sick leave — three weeks of vacation isn’t nearly as generous if you have use up eras for Christmas or the flu.

3. Categorize Taxable Benefits

After determining your locate bribe, it’s time to start categorizing benefits according to whether they’re taxable.

Pre-tax benefits allow you to enjoy the perk counting it toward your compensation.

“One dollar worth of pre-tax benefits — ones that you receive without having to pay income taxes — webs far better than$ 1 of additional wage parent or a taxable benefit, ” Norris said.

Some examples of pre-tax benefits include 😛 TAGEND

401( k ) competitors Paid disability insurance premiums Contributions to Health Savings Accounts Employee rebates

Norris pointed out that one trendy new benefit, student credit refund, may not be as priceless as it seems since employees are still responsible for compensate the taxes.

4. Evaluate Health Insurance Options

When Stone received a job offer, among the initial benefits that caught her attending was her qualification for health insurance after 30 periods of employment. She decided to dig a little further to determine its actual worth.

“I contacted the HR department and I said,’ I see that I’ll be eligible for insurance — are you able mail me the details on what that actually is and what the cost is to me out of each paycheck? ’” Stone said. She determined that the cost of her insurance premium per paycheck was lower than her current employer, which conveyed more take-home paying off her.

Norris agreed that you should ask the recruiting or human resources management bureau for details that go beyond a company’s sometimes fuzzy give of health insurance.

“Normally we find that those policy documents are only provided at the request of the job seeker, ” Norris said.

When comparing two renders, factor in your monthly premium, plus deductibles and co-payments for a clear idea of how much the health insurance will save you — or cost you.

“If they have a high-deductible health insurance, do they too have a health savings account that they contribute into? ” Norris suggested asking.

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5. How to Place a Value on Professional Development

A benefit that parties often overlook, chiefly because it has no clear-cut monetary value, is a company’s commitment to professional development.

“Sometimes it can be seen as a luxury item, so know how perpetrated the organization is to training and development or tuition reimbursement, ” said Anna Bray, director busines manager at Jody Michael Identify. “Is there a set bureau — that can be an indicator. Or is it like a two-person HR department for 1,000 employees? ”

If a company has a learning stipend or tuition repayment planned, ask for a specific amount to include in your rating of the compensation package.

6. Determining the Value of Other Benefits

Companies are getting more creative about the benefits they tout to prospective hires, from onsite child care to cooking world-class to Amazon’s indoor rainforest.( Get it? Amazon rainforest. Yeah .)

After you have assigned a monetary value to the benefits package, it’s time to evaluate how much each is worth to you.

“You shouldn’t just take[ the company’s] word at face value, ” Norris said. “You should determine how it will actually change your life personally and which benefits are helpful for you.”

7. Subtract Non-reimbursed Expenses

Although the excite of a activity render may leave you understanding only the positives, you should also calculate the expenses associated with a job.

“What parties often forget are the costs of the position, ” said Norris , was indicated that if you need to pay for parking or “buy a whole cupboard, ” you should subtract that quantity from your compensation package.

Although boss may be reluctant to divulge these costs, it’s important to ask about them.

“You really cannot be too over-informed, ” Norris said. “We find that employees are very excited when they discover employers and employees demands them and a little reluctant to tip the scale.

“But you’re showing interest by asking questions, and you should really dive late and then project how that will impact you over time.”

Be Ready to Negotiate a Compensation Package

OK, you’ve stacked up a brand-new offer to your current job or compared rivalling presents. Now what? Don’t skip this crucial step: negotiate.

Prospective boss should not be surprised or upset by it. But what components of a compensation package are most debatable?

“Salary, paid time off, training and development — those seem quite wide and varied, ” Bray said.

And formerly you’ve likened all of the tangible benefits, Bray stressed that there are aspects of the job that have no place on your ledger.

“Assuming the jobs are equal and it will provide career advancement, think about the company culture and the mission, ” she said.

That’s what sealed the agreement for Stone.

“The change in the vogue of management was a big factor, ” said Stone, who memo she reached out to employees to ask about the company culture. “Knowing that I was going to be able to better balance work and life — that was a big, big cheese for me.”

Tiffany Wendeln Connors is a staff writer/ journalist at The Penny Hoarder. Read her bio and other used to work, then catch her on Twitter @ TiffanyWendeln.

This was originally published on The Penny Hoarder, which promotions millions of books worldwide make and save money by sharing peculiar job opportunities, personal legends, freebies and more. The Inc. 5000 graded The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.