How to Compare Job Offers Using Take-Home Pay
Last updated: January 2025
When comparing job offers, the number on the offer letter doesn't tell the whole story. A $120,000 job in California might leave you with less money than a $100,000 job in Texas. Here's how to compare offers based on what actually matters: your take-home pay.
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Enter each salary and select the state to see actual take-home pay.
Open Salary Calculator →Why Gross Salary Is Misleading
Two job offers with the same gross salary can result in very different take-home pay because of:
- State income tax: Ranges from 0% to over 13%
- Local taxes: Cities like NYC add additional income tax
- Pre-tax deductions: Health insurance, 401(k) contributions
- Cost of living: What your money can actually buy
Real Example: Same Salary, Different States
Let's compare a $90,000 salary in three different states:
| Location | Gross | State Tax | Net Annual | Net Monthly |
|---|---|---|---|---|
| Texas | $90,000 | $0 | $69,639 | $5,803 |
| Colorado | $90,000 | $3,960 | $65,679 | $5,473 |
| California | $90,000 | $5,161 | $64,478 | $5,373 |
Key Difference
Same $90,000 gross salary, but the Texas job provides $5,161 more per year in take-home pay compared to California—that's over $430 extra per month.
Different Salaries, Same Take-Home Pay?
Sometimes a lower gross salary in one state equals more money in your pocket than a higher salary elsewhere:
Offer A: Texas
$85,000
State tax: $0
Take-home: $65,792/year
$5,483/month
Offer B: California
$95,000
State tax: ~$5,600
Take-home: $67,698/year
$5,642/month
Despite being $10,000 less in gross pay, the Texas offer is only about $159/month less in take-home. When you factor in California's higher cost of living, the Texas offer might actually be better financially.
What Else to Compare Beyond Base Salary
Take-home pay is crucial, but don't stop there. Consider these factors:
1. Health Insurance
- Compare monthly premiums (employee contribution)
- Check deductibles and out-of-pocket maximums
- A job with $200/month cheaper premiums is worth $2,400/year
2. Retirement Benefits
- 401(k) match is essentially free money
- A 4% match on $90,000 = $3,600/year in additional compensation
- Check vesting schedules—do you get to keep the match if you leave?
3. Bonuses and Equity
- Annual bonuses (guaranteed vs. discretionary)
- Stock options or RSUs (also taxed—consider net value)
- Signing bonuses (one-time, may need to repay if you leave early)
4. Other Benefits
- PTO days (more time off = more value)
- Remote work (save on commuting, clothes, food)
- Education/training stipends
- Gym memberships, commuter benefits, phone stipends
Quick Comparison Checklist
Use this checklist when comparing two offers:
Total Compensation Example
Here's how to calculate the real value of two offers:
| Component | Offer A | Offer B |
|---|---|---|
| Base Salary | $90,000 | $85,000 |
| Net Salary (after state tax) | $64,478 | $65,792 |
| 401(k) Match (4%) | +$3,600 | +$3,400 |
| Health Insurance Premium (annual) | −$3,600 | −$1,800 |
| Expected Bonus (10%) | +$9,000 | +$0 |
| Effective Total Value | $73,478 | $67,392 |
In this case, even though Offer B has higher net salary, Offer A's bonus and 401(k) match make it worth more overall (assuming the bonus is reliable).
Disclaimer
This article provides general guidance for comparing job offers. Actual tax calculations may vary based on your specific situation, deductions, and credits. Benefit values are examples and will differ by employer. This is not financial or career advice. Consider consulting with a financial advisor or tax professional for personalized guidance.
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