How to Value Equity and Benefits in a Job Offer

To value benefits, add up the money the employer pays that you would otherwise pay yourself, such as the health insurance share, the retirement match and paid time off. To value equity, ask what it is, when it vests and what it could realistically be worth, then discount it for risk. Count only what you would actually use or receive.

How do I value health cover?

Find the employer's share of the premium and any difference in your out-of-pocket costs, such as deductibles. If one job covers most of your premium and another covers little, the difference is real income. Where public healthcare covers you, other benefits matter more.

How do I value a retirement match?

If an employer matches your contribution up to a limit, the match is extra pay, but you only receive it if you contribute. For example, a match of 4 percent on a salary of 60,000 is worth 2,400 a year if you contribute enough to receive it. This is an example, so use your own numbers and check any waiting period before the match begins.

How do I value paid time off?

Divide salary by working days to find the value of a day, and multiply by the extra days one offer gives you over another. Extra leave is worth the most if you will take it, so count only the days you realistically will.

What is the difference between options and RSUs?

Stock options give you the right to buy shares at a set price, so they have value only if the share price rises above it. Restricted stock units are shares granted to you as you vest, and they have value even if the price stays flat. Both usually vest over several years, and many have a cliff, meaning nothing vests before a set date.

How should I treat equity in a private company?

Be cautious. Shares in a private company may be hard to sell, and a high paper valuation does not mean you can turn them into cash. Many people treat private equity as a possible bonus and make the decision on cash and benefits. Ask how many shares exist and what share your grant represents.

How do I compare across years?

Sign-on bonuses help in year one, and equity may be back-loaded, so compare offers over three or four years. Add the cash, benefits and vested equity for each year and compare the totals.

Where can I run the numbers?

The Rezumz Job Offer Comparison Calculator lets you enter salary, bonus, equity, benefits and time off for each offer and see the yearly and hourly value side by side in your browser, with no account.