Two job offers, and the arithmetic almost nobody does
Comparing two job offers is one of the highest-stakes sums a person ever does, and it is usually done by putting the two base salaries side by side. Everything else — the bonus, what the employer puts into a pension and what you are required to put in, what the health cover costs you, the leave, the signing amount, the fare, and the hours the journey eats — arrives afterwards, one payslip at a time.
Here is the whole method, with a fully worked example you can check on paper.
Step one: put every annual money line in one column
Two invented offers. The working year is 50 weeks, 5 days a week, so 50 × 5 = 250 on-site days. A signing amount is spread over 3 years.
Offer A, base $100,000: bonus 10% is $10,000; employer pension 5% is $5,000; a $9,000 signing amount over 3 years is $3,000 a year; your own required contribution 4% is −$4,000; benefits you pay for, −$1,800; commute at $12 a day, $12 × 250 = −$3,000.
100,000 + 10,000 + 5,000 + 3,000 − 4,000 − 1,800 − 3,000 = $109,200.
Offer B, base $108,000: no bonus; employer pension 3% is $3,240; your own 5% is −$5,400; benefits −$4,200; commute at $8 a day, $8 × 250 = −$2,000; one other annual cost, −$1,200.
108,000 + 3,240 − 5,400 − 4,200 − 2,000 − 1,200 = $98,440.
B's base is 108,000 − 100,000 = $8,000 higher. A's total is 109,200 − 98,440 = $10,760 higher. The comparison people actually make and the comparison that decides the money give opposite answers.
Step two: divide by the hours
A is a 40-hour week: 40 × 50 = 2,000 paid hours, so 109,200 ÷ 2,000 = $54.60 an hour. B is a 45-hour week: 45 × 50 = 2,250 hours, so 98,440 ÷ 2,250 = $43.75 an hour.
Step three: count the commute as the time it is
A is 45 minutes each way: 250 × 45 × 2 = 22,500 minutes, which is 22,500 ÷ 60 = 375 hours a year. Add them: 2,000 + 375 = 2,375 hours, so 109,200 ÷ 2,375 = $45.98 an hour — a gap of 54.60 − 45.98 = $8.62 against the paid-hours figure.
B is 30 minutes each way: 250 × 30 × 2 = 15,000 minutes, or 250 hours. 2,250 + 250 = 2,500 hours, so 98,440 ÷ 2,500 = $39.38.
Those 375 hours are more than nine 40-hour weeks, and they appear on no salary line anywhere.
Step four: price the leave, but do not add it in
A's daily rate is 100,000 ÷ 250 = $400, so 20 days of leave is 20 × 400 = $8,000. B's is 108,000 ÷ 250 = $432, so 15 days is 15 × 432 = $6,480.
That value does not get added to the total, because leave is already paid inside the base salary and adding it again counts the same money twice. It is worth writing down anyway, so that 20 days and 30 days are not read as the same offer. They are not.
Three questions, not one
Total annual value asks how much money. Value per working hour asks how much per hour you are contracted for. Value per hour including the journey asks how much per hour the job actually takes. They are different questions and they frequently rank the same offers differently — which is the single most useful thing this arithmetic tells you.
What the sum cannot see
Every figure above is pre-tax unless the numbers you put in were already post-tax. Tax, contributions and pension relief differ by country, by year and by household, they are not modelled here, and they can reorder the result. And the arithmetic counts money and hours only: the work itself, the people, what you would learn, where it leads and how secure it is are all real, and not one of them is in it.
The Job Offer Comparison takes up to four offers and lays out exactly these lines. It ranks by the measure you pick, shows the other two rankings beside it, and states no verdict about which to take — the numbers above are invented, and it makes no claim about what any of them normally are.