Two offers can look identical on base salary and differ by tens of thousands in practice. One has a 10% bonus target and a 3% 401(k) match; the other has a 20% bonus that has paid out at 60% for three years, plus equity you cannot value yet. Comparing the headline number alone is how people accept the worse offer with confidence.
Here is a framework for turning an offer letter into a comparable number — and then into a decision.
Start with total cash compensation
Total cash = base + expected bonus + any guaranteed allowances (car, housing, shift differential, overtime you can reasonably count).
- Bonus: use the historical payout, not the target. If you cannot find out, model it at 80% of target and mark it as an assumption.
- Overtime and shift differentials: for hourly and clinical roles, these can be 15–30% of real earnings. Ask for average hours and differential rates.
- Commission: ask for the team's quota attainment distribution, not just the plan.
Then value the equity — carefully
Equity is compensation with a probability distribution and a clock attached. For public-company RSUs, use the current share price and the vesting schedule; the grant value is roughly the share count times today's price. For private-company options, the honest answer is that the value is speculative: strike price, 409A valuation, preference stack and liquidity all matter.
A practical approach: value public RSUs at face value, private equity at zero to 50% of the stated grant depending on stage and your risk tolerance, and write the number down as an assumption. Never let a headline "equity package" decide an offer on its own.
Then the benefits that behave like cash
- 401(k) match: add the match you will actually earn, not the maximum possible.
- Health insurance: compare premiums and deductibles. A $0-premium plan with a $7,000 deductible is not the same as a richer plan.
- Commute and parking: a $4,800 annual parking cost is a real reduction.
- Paid leave: unlimited PTO is not automatically generous; ask what the team actually takes.
- Tuition, certification and licensing support: relevant in nursing, trades and regulated fields.
What does not go in the number
Culture, manager quality, growth and stability are real, but they belong in a separate column. Do not pretend they are cash. Write them down qualitatively and weigh them after the math — "the team is better" is a legitimate reason to take less money, as long as you know what you are trading.
| Component | Offer A | Offer B |
|---|---|---|
| Base | $110,000 | $100,000 |
| Bonus (expected) | $8,800 (80% of 10%) | $18,000 (90% of 20%) |
| Equity (annualized, valued) | $0 | $12,000 (valued at 50%) |
| 401(k) match | $4,400 | $3,000 |
| Benefits value | $9,000 | $11,000 |
| Total | $132,200 | $144,000 |
| Cost-of-living index | 100 | 112 |
| Adjusted total | $132,200 | $128,571 |
The questions to ask before deciding
- What did the bonus actually pay out the last two years?
- When does the first equity tranche vest, and what happens if I leave?
- What are the premiums and deductibles on the health plan?
- Is there a relocation package, and is it taxable?
- What is the review cycle, and who decides raises?
Bottom line
Convert each offer to an annual cash figure, add the benefits that behave like cash, value equity conservatively, and adjust for local costs. Then decide with the non-financial factors in view. Use the offer comparison tool to do the arithmetic and keep the assumptions visible.
Estimate net pay from a gross salary with an editable tax rate. An estimate, not tax advice.