Comparing Pay with Benefits to without

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prickly_comment
Posts: 13
Joined: Sun Dec 02, 2018 1:14 pm

Comparing Pay with Benefits to without

Post by prickly_comment » Wed Jul 10, 2019 3:47 pm

1. How does one compare a job with salary and much better benefits to another job that is hourly with almost no benefits?

2. Also, what resources do you guys use to find out what your skills are worth? Glassdoor doesn't work super well and very rough at best. H1B salary post sites sort of help. The best has been what recruiters tell me as a contractor.

I have an interview coming up as a full time employee. Different company. I have more experience since my last raise as a contractor yet, if I take a new job with more benefits does my pay go down? I know this stuff isn't set in stone but I'm trying to find numbers so I can walk into the interview with confidence and land a win/win for myself and the employer. Mathematical equation?

Current Job:
50% health insurance covered
3 Sick Days

New Job:
100% health insurance covered
401k
20 days PTO
tuition reimbursement (i don't know the amount, I do plan on using this)
gym membership
public commute fully subsidized

delamer
Posts: 8118
Joined: Tue Feb 08, 2011 6:13 pm

Re: Comparing Pay with Benefits to without

Post by delamer » Wed Jul 10, 2019 4:44 pm

You assign a value to each of the benefits (annual), add salary plus benefits, and compare.

In the case of the health insurance, if you are paying your half of the premium with pretax dollars then that reduces that cost. PTO per day is your annual salary divided by 2080.

The only tough one is the tuition reimbursement, because the amounts are unknown and temporary.

Quirkz
Posts: 148
Joined: Mon Jan 14, 2019 5:32 pm

Re: Comparing Pay with Benefits to without

Post by Quirkz » Wed Jul 10, 2019 5:23 pm

As a ballpark, I tend to assume that a job with benefits is worth at least 25% more than the apparent hourly rate, compared to a job without. More if the job without benefits also has you paying the self-employment tax.

Personally, the difference between 3 days PTO and 20 days PTO is worth about half a million dollars, but not everyone is going to agree on that calculation. :P

jbranx
Moderator
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Re: Comparing Pay with Benefits to without

Post by jbranx » Wed Jul 10, 2019 6:52 pm

{Topic is now in Personal Finance (Not Investing)}

Sconie
Posts: 632
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Location: Arizona

Re: Comparing Pay with Benefits to without

Post by Sconie » Wed Jul 10, 2019 7:10 pm

If the second organization is offering benefits such as tuition reimbursement, gym membership and the like----in addition to 100% health insurance---I would not be surprised if there are not some other benefit which they have that you may not even be aware of. How about life/ADD insurance.....paid holidays and the like?

Granted, at the end of the day it is the value of one package against another, however, my impression has always been that organizations which provide a solid benefits program----in addition to good direct compensation----tend to be more "established" and possibly, more substantial in terms of finances.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

UpperNwGuy
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Joined: Sun Oct 08, 2017 7:16 pm

Re: Comparing Pay with Benefits to without

Post by UpperNwGuy » Wed Jul 10, 2019 7:13 pm

When you compare the two jobs side by side, don't forget the intangibles such as job security, opportunity for promotion, etc.

Thesaints
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Joined: Tue Jun 20, 2017 12:25 am

Re: Comparing Pay with Benefits to without

Post by Thesaints » Wed Jul 10, 2019 7:26 pm

prickly_comment wrote:
Wed Jul 10, 2019 3:47 pm
1. How does one compare a job with salary and much better benefits to another job that is hourly with almost no benefits?
Not straightforward. There are benefits that have no value for you, so it is not simply "the market value of benefits" however that can be estimated.
For instance, you can have jobs with very different health benefits, but thats not an advantage/diadvantage for the person who is in good health.

In general, one would want more cash, compared to a benefit worth the same amount, but after-tax considerations have to be made.

HomeStretch
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Joined: Thu Dec 27, 2018 3:06 pm

Re: Comparing Pay with Benefits to without

Post by HomeStretch » Wed Jul 10, 2019 7:32 pm

To add to the good advice from other posters, understand the overtime, if any, required by the new salaried position. Salaried employees are generally not paid extra for overtime hours whereas hourly employees are compensated for hours worked.

Unless the hourly job has a very high contract rate or the salaried job has a lot of overtime, my guess is that the salaried position’s total compensation (including benefits) will outweigh the hourly position’s total compensation.

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onthecusp
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Re: Comparing Pay with Benefits to without

Post by onthecusp » Wed Jul 10, 2019 8:46 pm

When I made my last move I went from a salary where I could get overtime at a straight hourly rate, minimal 401k match, roughly equivalent medical. I was offered a substantially lower base salary (as well as no OT potential) but excellent 401k, long term incentive stock grants that vest over 4 years, and an expected but not guaranteed bonus. It has worked out great. I did the math, making some assumptions about the grants and bonus. I rarely worked OT in either job so that was not an issue for me.

Now that I'm about set for retirement funding I'm considering going back to the first kind of situation but strictly on an hourly basis. I expect to get a much higher base rate, no benefits, pay my own medical. I'm doing the math again.

I will probably do it for the flexibility to slip into part time mode even though if I work full time the total will be a pay cut. So figure out what every thing is worth to you and add it up.

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