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How to calculate the true net compensation for a position.


The true compensation for a position is not always apparent.  When you are in the job market, you should be able to quantify the compensation.

Here are some things to consider.




As my job search progressed I realized that comparing jobs and compensation was a bit more complicated than I thought. I had to compare full time W2, contract and contract-to-hire positions. Some were salary and some were hourly. Some considerations in any analysis are:

  • Intangibles
    • What is the culture?
    • What level of freedom/flexibility will you have? Review sites such as Glassdoor.com help shed some light on the culture.
    • How would the position affect your resume and career path. i.e. If your career plans include getting into management, does this position facilitate that?
    • What is the environment? (I worked in a position where our office was in the production area. They used nasty chemicals such as Toluene and Benzine. )
  • Semi Tangibles
    • Unemployment – I am a Pennsylvania resident. If I work in PA, I am eligible for unemployment benefits after a short stint. However, if I work in New Jersey, I would not be eligible for benefits unless I was eligible for benefits from a previous Pennsylvania job.

The true compensation for a job


Base Salary Figure your expected base salary
  • Hourly
 Hours per week * weeks
  • Yearly
BonusWhat is the expected bonus? For some companies, this could be between $0 and $15,000. Take your best guess
GrossAdd the salary and Bonus
Philly Wage .034654I am not a resident of Philadelphia. If I take a position in Philadelphia, I am hit with a 3.4 % additional tax
Commuting:Figure your commuting expenses for a the position. Subtract out work from home days.
Tolls (cost, days per year)Take the daily cost of tolls times the number of days you expect to commute to work.
Account for vacation, sick, personal days)
Miles rate (daily miles, Fed Rate
times days/year)
Take the daily miles times the Federal mileage rate (.53 in 2017) and
multiply that by the number of days you will commute to work
trail passIf you are commuting using public transportation add that.
Pay ScheduleIntangible – How often do you get paid?  Weekly paychecks do make managing your
finances a little easier
Health Plan costs Calculate the expected health care costs. This is not entirely quantifiable –
If you pick a plan where reimbursement is capped or one that has high
out of pocket expenses and you need care, that can skew the whole equation
Health Plan (yearly pays, ded per pay)Most plans will tell you how much per month is deducted. Take the number of yearly
pays and how much is deducted per pay.
Dental (yearly pays, ded per pay)Same as above
Vision (yearly pays, ded per pay)Same as above
Total out of pocketAdd up the health, dental and vision
Matching retirement(Expected contrib,
match rate)
 A match for your retirement contributions can add up quickly. Try to calculate how much
you will get from your employer for matches
NET PAYTake the compensation and subtract the deductions
Hours expectedHow many hours does your employer require?  Unfortunately, many developers are
considered ‘exempt’ employees. You could end up working 60 hours or more a week.
A $100,000 salary for a 38 hour week beats a $110,000 salary for 60 hours/week
Actual Hours How many hours will you work per year – subtract out vacation, sick, personal and holidays
Travel Time/dayHow many hours do you expect to travel each day times the days you expect to commute. This can add
up quickly. A remote position at 40 hours/week vs a position at 40 hours/week where you have 2
hours of commuting can give you a couple hundred extra hours per week
Parking How much will you spend in parking each year?
Sick Days/year How many sick days?
PersonalHow many personal days?
VacationThis is insane. Some companies ‘offer’ no vacation for the first year and then 5 days for
Personal and vacation in the second year. Also, some companies will start accruing
when you start work. Others don’t give you the time until the end of the 1st year.
Also figure in paid holidays
Work from homeThe ability to work from home affects both your net compensation and your mental state
Physical Environment 0-10What is the environment of the office? Are employees shoehorned in? Is it clean?
What is your impressions of the people?
Safety 0-10 Is the work location in a safe neighborhood?
Travel A 20 mile commute is not a 20 mile commute. One location might be on nice, stress
Free roads while another is daily torment on the Highway to Hell
Freedom Factor How much freedom do you have?

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