How to Calculate the Value of Your Salary & Benefits

There is a lot more to your total compensation than just your salary. When calculating the total value of your compensation, you should also incorporate all the benefits you use or are likely to use.


Your benefits may be clearly financial (bonuses, retirement contributions, etc.) or they may offer time savings or flexibility.


In this article, we’ll walk you through the things you should consider in calculating the total worth of your salary and benefits. We’ll cover:

  • Financial benefits
  • Non-financial benefits (like flexibility)

​Total Compensation Calculator

The obvious place to start with calculating your total compensation is the items that have a clear financial tie. We'll focus on the most common items in calculating your total compensation

If you are not likely to utilize a benefit, do not include the value.

Because some of your benefits may vary from year to year (like bonuses), it can be helpful to calculate your benefits twice - once with best case and once with worst case.


This one should be pretty straightforward. Plug in your total gross salary (before any deductions are taken).

Paid Vacation Time (PTO)

To calculate the value of your time off, divide your salary by 260 to calculate your average pay per day. Then, multiply this value by the number of days off you receive per year.


Bonuses tend to vary year to year and may be only partially within your control. If you know the realistic value of the bonus, calculate your compensation with this. Just keep in mind, bonuses aren’t guaranteed.


Retirement accounts

Does your company offer a 401(k), 403(b), SEP IRA, pension or other retirement account?


While the value of having access to one of these may be difficult to calculate, they carry a lot of value if you are saving towards retirement (which we hope you are!).


Some companies provide pensions or retirement account matching which are easy to add into the total compensation calculation. Factor in the annual value that the company contributes for you.


If you have to contribute to your retirement account to receive a company match, do it! Factor in the value of the company match.


Be aware of any vesting periods that a company may have. The vesting period is the period of time when you don’t fully own the company contributions and in some cases may cover several years.

Profit sharing

You may be eligible for company profit sharing in the form of stock, retirement contributions, or cash.


Add in the value of this, being aware that it may fluctuate significantly since it’s dependent on the company’s total performance.


Insurances - health, life, disability

Many employers offer one or multiple types of insurances.


For health insurance - add in the amount paid by your employer towards the cost of coverage.

If your employer contributes to a Flexible Savings Account (FSA) or Health Savings Account (HSA), add this amount in as well.


For disability insurance - add in the amount paid by your employer towards the cost of coverage.

For life insurance - add in the amount paid by your employer towards the cost of coverage.

Leave options

Does your company offer paid parental (maternity/paternity) leave? Factor this in if it’s something you may potentially use.


Education reimbursement

Factor in the value of any company paid/repaid classes you may take, typically classes that are used or could be used toward a degree.


Education reimbursement normally comes with some expectation of you staying with a company for a certain period of time after you use it. Otherwise, you may be required to repay it.


These reimbursements are often separate from company training budgets for shorter/smaller trainings such as workshops.


Company Stock

Larger companies may allow purchase of company stock at reduced prices or grant a certain number of stocks per year as part of your compensation.

For reduced purchase price stocks, you can calculate the value of the discount times the number of stocks you are likely to purchase. Keep in mind that there are tax implications for this.

For stock units which are granted each year, you can calculate the stock price times the number of stocks you are likely to be granted. In this case, you likely will have a vesting period and gain full ownership over time.


Other perks

We’ve covered many of the common compensation and benefit items that can be easily financially quantified.

There are certainly more benefits available though, such as:

  • Parking/commuter benefits
  • Gym membership
  • On-site childcare
  • Adoption assistance

If you receive one of these benefits or others that we haven’t listed that you use or are likely to use, add them in.


One Time Payments

In addition to the ongoing compensation and benefits, there are some other things you should factor in if you’re putting a value on a job offer.

Signing bonuses (often requiring repayment if you leave before a certain time) and relocation packages are the most common one time benefits that you may take advantage of.

Non-Financial Benefits

While the majority of benefits are easy to put a value on, there are others which do bring value to your life, but are not as easy to quantify. They tend to result in a time savings or added flexibility.

If you have access to some of these benefits and are likely to take advantage of them, they should carry some weight when deciding between offers.

Remote work flexibility

​Does your company allow you to work remotely part or full time? This may mean a savings in commuting expenses (which you can calculate and add to your compensation) and time.


Hours flexibility

Many companies allow alternative work schedules. For instance, instead of a 5 day work week with 8 hour days, you work 4 days of 10 hours each.


The flexibility could also show up in start/end times to your day which may bring added convenience for you.

If you might take advantage of these, you should consider them even if they are difficult to put a price on.


On-site childcare, fitness, cafeteria

You should put a value on these, but they also have a time savings which should be considered.

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