Total compensation is salary plus the value of everything else the job provides.
Step 1: Let's Learn
Read it, or press Listen and follow the words.
Benefits have value
Employer-paid health insurance, a retirement match and paid leave are real money. A match of 5% on a $50000 salary is $2500 a year.
Jobs have costs too
Commuting, parking, required clothing and childcare all reduce what a job is really worth.
Cost of living
A higher salary in an expensive city can leave less money than a lower one elsewhere. Compare after housing, not before.
Per hour, not per year
A salaried job demanding 60-hour weeks may pay less per hour than an hourly job. Divide before deciding.
What numbers cannot capture
Stability, learning and the commute time itself matter. The arithmetic informs the decision rather than making it.
Salary is one line of the package
Health cover, retirement contributions, paid leave and transport allowances all have monetary value. A lower salary with strong benefits can exceed a higher one without them, and only a total comparison shows it.
Costs differ too
A longer commute costs money and hours. A job requiring relocation carries moving costs and possibly a higher cost of living. Subtracting the costs of each offer is as necessary as adding the benefits.
Put everything on a common basis
Convert each element to an annual figure and total them. This is the same principle as unit pricing: comparison requires a shared unit, and different pay structures do not naturally share one.
Not everything is a number
Hours, autonomy, training and the work itself matter and do not convert to currency. The arithmetic settles the financial comparison, and the financial comparison is only part of the decision.
Step 2: Try It Yourself
Tap and try it out.
Salary
Benefits
Job costs
Salary has the most. It has 460 more than Job costs.
Step 3: Watch an Example
One step at a time.
Watch Sana Compare Two Offers
Offer A pays $50000 with a 5% retirement match. Offer B pays $53000 with no match and $3000 a year in commuting.
- Step 1
Offer A adds a match of 5% × 50000 = $2500, giving $52500 in total value.
Step 4: Your Turn
Practice makes it stick.
The Match
Problem 1 of 2
A 5% retirement match on a $50000 salary. How much per year, in dollars?
dollars
The Commute
Problem 2 of 2
$12 a day for 250 working days. Annual commuting cost, in dollars?
dollars
Weigh the Package
1 of 8
A 4% match on a $60000 salary. Annual value in dollars?
2 of 8
Salary $50000 plus $2500 benefits. Total compensation in dollars?
3 of 8
$53000 salary minus $3000 commuting. Real value in dollars?
4 of 8
$10 a day for 250 days. Annual cost in dollars?
5 of 8
$52000 salary for 2600 hours a year. Hourly rate in dollars?
6 of 8
$52000 salary for 2080 hours. Hourly rate in dollars?
7 of 8
Which belong in total compensation rather than salary alone?
8 of 8
Salary $45000, benefits $5000, job costs $2000. Net value in dollars?
Step 5: Quick Check
Show what you know.
Question 1 of 2
A 6% match on a $40000 salary. Annual value in dollars?
Question 2 of 2
Why can the higher salary be the worse offer?
What You Learned
- Total compensation is salary plus benefits minus job costs.
- A retirement match and paid insurance are real money.
- Divide by hours worked before deciding which job pays better.