Transparent method
The formula
Worked example
Example inputs
How to interpret the result
Comparing a counteroffer against a current offer only makes sense when recurring elements, salary, and one-time elements, a signing bonus, are kept clearly separate, since a large one-time bonus can make a counteroffer look dramatically better in year one while barely changing the ongoing annual compensation that actually compounds over a multi-year career.
Before you rely on it
What to check
Separate the recurring annual compensation change from any one-time signing bonus or similar payment before judging how much a counteroffer actually improved the deal.
The common error
Where people go wrong with salary negotiation calculator
Evaluating a counteroffer's total first-year value without separating out a one-time signing bonus from the ongoing salary change. A large bonus can make year one look much better while the recurring compensation, the part that compounds over a career, barely moved.
Sensitivity evidence
How current base salary changes the first-year compensation increase
| Current base salary | First-year compensation increase | Percentage compensation increase | Monthly gross-value increase |
|---|---|---|---|
| $72,000 | $43,000 | 59.7% | $3,583 |
| $81,000 | $34,000 | 42.0% | $2,833 |
| $90,000worked example | $25,000 | 27.8% | $2,083 |
| $99,000 | $16,000 | 16.2% | $1,333 |
| $108,000 | $7,000 | 6.5% | $583 |
Every input, tested
Which input moves the first-year compensation increase most
| Input | Tested from | To | First-year compensation increase at each end | Swing |
|---|---|---|---|---|
| Offered base salary | $90,000 | $110,000 | $15,000 to $35,000 | $20,000 (80%) |
| Current base salary | $81,000 | $99,000 | $34,000 to $16,000 | $18,000 (72%) |
| Annualized equity-value change | $7,200 | $8,800 | $24,200 to $25,800 | $1,600 (6.4%) |
| Annual bonus-value change | $4,500 | $5,500 | $24,500 to $25,500 | $1,000 (4.0%) |
| Annual benefit-value change | $1,800 | $2,200 | $24,800 to $25,200 | $400 (1.6%) |
Two variables at once
First-year compensation increase by current base salary and offered base salary
| Current base salary \ Offered base salary | $80,000 | $100,000 | $120,000 |
|---|---|---|---|
| $72,000 | $23,000 | $43,000 | $63,000 |
| $81,000 | $14,000 | $34,000 | $54,000 |
| $90,000 | $5,000 | $25,000 | $45,000 |
| $99,000 | -$4,000 | $16,000 | $36,000 |
| $108,000 | -$13,000 | $7,000 | $27,000 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Current base salary | $90,000 |
| Offered base salary | $100,000 |
| Annual bonus-value change | $5,000 |
| Annualized equity-value change | $8,000 |
| Annual benefit-value change | $2,000 |
| First-year compensation increase | $25,000 |
| Percentage compensation increase | 27.8% |
| Monthly gross-value increase | $2,083 |
Where the inputs come from
Current base salary and offered base salary give the pay change. Annual bonus-value change, annualized equity-value change and annual benefit-value change capture the rest of the package: a higher bonus target, more equity or better benefits such as a larger 401(k) match or lower premiums. Value each item realistically, discounting equity and bonuses that are not guaranteed. Get the offer terms in writing.
Using the first-year compensation increase in a real decision
Use it to decide how much to negotiate for and which items matter: a higher base salary compounds into future raises and bonuses, so it is usually the most valuable to push on.
When the result stops applying
Equity and bonuses are uncertain and often overvalued at the offer stage. Non-financial factors such as flexibility, growth, commute and culture do not appear here. Higher salary can push you into higher taxes, and the cost of living in a new city can offset it. A raise from a job change should also be compared with what you could earn by negotiating where you are.
What to compare it with
Compare multiple offers on the job offer comparison calculator, and see the take-home effect on the take-home pay page. The raise and real wage calculators judge pay changes, and the cost of living calculator adjusts for location. Prepare with market salary data for your role and region.
People also ask
Frequently asked questions
How much should I ask for in a salary negotiation?
Base your request on market data for your role, experience and region, and it is common to ask for somewhat above your target to leave room to settle.
Which part of the package is best to negotiate?
Base salary, since it compounds into bonuses, raises and retirement match. Signing bonuses and equity are also negotiable, and benefits sometimes are.
Should I disclose my current salary?
In some places employers are prohibited from asking. You can redirect the conversation to the market rate for the role instead.