AutoInsuranceMM.Info – Health insurance for self employed – Show Me the Benefits: How to Compare Job Offers Beyond the Paycheck
“Then about two months later, I decided that I had made the wrong decision,” Stone says with a laugh. “I wound up calling them back and pursuing the option again.”
This time, she looked at more than the salary.
“That 20% wasn’t enough to pull me over the first time,” Stone says. “A lot was decided in large part due to benefits.”
In a hot job market, where companies are having to do more to woo employees, benefits are becoming as valuable as a paycheck. So says Alison Norris, an advice strategist and certified financial planner for SoFi.
“Compensation encompasses so much more than just salary,” Norris says. “Choosing a position [because of] your overall compensation will often be far more financially advantageous than focusing on the one that just has the higher base salary.”
Benefits are more than just add-ons and fun perks — they account for 31.8 percent of an employee’s total compensation, according to the Bureau of Labor Statistics.
But how do you compare the number on a paycheck to benefits like paid dental insurance? Here are seven areas to concentrate on when evaluating job offers.
Determine Your Base Pay
If you’re comparing compensation packages, be sure you’re looking at comparable dollar amounts, Norris advises.
“If you’re having trouble and really want to compare apples to apples, looking at your hourly rate — even if you’re salaried — is often easier,” says Norris, who notes that hiring bonuses should be included when calculating the base pay.
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 position is a W2 position and the other is an independent contractor, you should add in the taxes your employer would pay on your behalf, which can be huge,” Norris says. “Employers pay 7.65% of your income in social security and medicare taxes.”
How to Factor in Paid Time Off
One way to assign a dollar value to paid time off is to incorporate it into your hourly rate.
Don’t forget to include paid holidays, volunteer days and sick leave — three weeks of vacation isn’t nearly as generous if you have use up days for Christmas or the flu.
Know Your Pre-Tax Benefits
After determining your base pay, it’s time to start categorizing benefits according to whether they’re taxable.
Norris offers as an example: A trendy new benefit, student loan repayment, may not be worth as much as it seems, since employees are still responsible for the taxes on the student loan payment their employer makes for them.
“One dollar worth of pre-tax benefits — ones that you receive without having to pay income taxes — nets far better than $1 of additional salary raise or a taxable benefit,” Norris says. “Fortunately, there’s a plethora of ones that are tax-free to the employee.
“Some common ones that we see are 401(k) matches, paying of disability insurance premiums, contributions to the health savings accounts and employer discounts.”
How to Calculate Health Insurance
When Stone received a job offer, among the initial benefits that caught her attention was her eligibility for health insurance after 30 days 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 — can you send me the details on what that actually is and what the cost is to me out of each paycheck?’” Stone says. She determined that the cost of her insurance premium per paycheck was lower than her current employer, which meant more take-home pay for her.
Norris agrees that you should ask the recruiting or human resources department for information that goes beyond a company’s sometimes vague offer of health insurance.
“You can also request policy documents if they provide any type of insurance coverage — health insurance, disability insurance, dental insurance,” Norris says. “Normally we find that those policy documents are only provided at the request of the job seeker.“
When comparing two offers, 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 also have a health savings account that they contribute into?” Norris suggests asking.
Valuing Professional Development
A benefit that people often overlook, largely 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 committed the organization is to training and development or tuition reimbursement,” says Anna Bray, executive career coach at Jody Michael Associates. “Is there a training department — that can be an indicator. Or is it like a two-person HR department for 1,000 employees? Or maybe they have a robust partnership with another training organization.”
If a company has a learning stipend or tuition reimbursement program, ask for a specific amount to include in your appraisal of the compensation package.
Determining the Value of Benefits
Companies are getting more creative about the extra benefits they tout to prospective employees, from free onsite childcare to cooking classes to an indoor rainforest.
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 says. “You should determine how will it actually change your life personally and which benefits are helpful for you.”
Subtracting Non-reimbursed Expenses
Although the excitement of a job offer may leave you seeing only the positives, you must also calculate the expenses associated with a job.
“What people often forget are the costs of the position,” says Norris, noting that “if you have to buy a whole wardrobe” or pay for parking, you should subtract that amount from your compensation package.
Although employers may be reluctant to divulge these costs, it’s important to ask about them.
“You really cannot be too over-informed,” Norris says. “We find that employees are very excited when they hear an employer wants them and a little bit reluctant to tip the scale.
“But you’re showing interest by asking questions, and you should really dive deep and then project how that will impact you over time.”
Be Ready to Negotiate
OK, you’ve stacked up a new offer to your current job or compared competing offers. Now what? Don’t skip this crucial step: negotiating.
Prospective employers should not be surprised or offended by it. But what components of a compensation package are most negotiable?
“Salary, paid time off, training and development — those seem pretty wide and varied,” Bray says.
And once you’ve compared all of the tangible benefits, Bray stresses 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 says.
That’s what sealed the deal for Stone.
“More than anything… the change in the style of management was a big factor,” says Stone, who says 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 deal for me.”
Tiffany Wendeln Connors is a staff writer at The Penny Hoarder. Her favorite benefit at her job is free bike parking. And the cheese.
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