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Getting a job offer is exciting, but even an eye-popping new salary shouldn't be the only factor you consider when deciding whether to accept a new position. Before saying yes to a new job, evaluate benefits and other factors, such as opportunities for career advancement, financial perks and costs.
The Financial Factors of a Job Offer to Consider
On average, employee benefits are worth around 30% of compensation, according to the Bureau of Labor Statistics. To see how a new job could change your financial outlook, take these factors into account in addition to what you'll be paid.
Health Insurance
Employer-sponsored health insurance for a family cost an average of $22,463 in 2022, according to the Kaiser Family Foundation, but employees pay only $6,106 of that on average. Find out what type of health insurance is offered, whether vision and dental coverage is included, how much you'll pay and whether family members are eligible.
Wellness Programs
Wellness benefits can include weight management or smoking cessation programs, free or low-cost gym memberships, on-site fitness classes and more. There may even be financial incentives for doing things like exercising and completing annual health assessments.
Life and Disability Insurance
Many employers offer a certain amount of term life insurance and/or disability insurance at little or no cost, usually with an option to buy more.
Tax Advantaged Savings Plans
Health savings accounts (HSAs) and flexible spending accounts (FSAs) can save you money on medical expenses, dependent care and taxes. If the employer offers HSAs or FSAs, find out what expenses are covered and what happens to the funds at the end of the year.
Retirement Plans
While 401(k)s are the most common employer-sponsored retirement plan, other options include a 403(b), SIMPLE IRA, SEP IRA, employee stock ownership plan, profit-sharing plan or pension plan. Learn how the retirement plan works, when you're eligible, and whether your employer contributes. For example, some companies match employees' 401(k) contributions up to a certain percentage of their salary.
Financial Incentives
Public companies may offer employee stock options, allowing you to buy shares of your employer's stock at a set price. Find out when options vest, when you can exercise them and what happens if you leave the company.
If you receive bonuses or commission, ask how the amount is determined, how you can earn it and when you receive it. Does the offer include a signing or hiring bonus? Ask how much and in what form (typically cash or stock options).
Time Off
How much paid time off will you get each year and when does that increase? At year-end, can you roll over or cash out unused PTO, or do you need to "use it or lose it"? Also ask about sabbaticals and unpaid time off.
Family Benefits
Find out if the employer offers financial assistance for adopting a child, fertility treatments or freezing your eggs. Ask about maternity, paternity and family leave policies.
Already have children? On-site child care facilities, assistance paying for child care or discounts with local child care providers can save you money. Some employers have arrangements to provide emergency child care for sick children. Companies may even provide help applying for college financial aid or contribute to your 529 college savings plan.
Housing Assistance
Employer assisted housing (EAH) programs may help employees get mortgages, match their savings for a home down payment or provide money for a down payment. Sometimes, loans are forgiven if you stay with the company for a certain time.
Career Advancement
Ask about career paths and how the employer helps you succeed. Are there mentorship or in-house training programs? Will the company pay for you to join professional associations, take courses or get certifications? Some companies even pay for college or graduate school.
Flexible Work
Flexible work options, such as working remotely or choosing your own hours, can help you balance work and home life and reduce child care and commuting costs.
Student Loan Repayment
Some companies are easing employees' student loan debt by advising on ways to defer or refinance student loans or helping pay them off. For example, employers may match a percentage of your loan payments.
Commuter Benefits
Does your new job require physically going to work? Commuting benefits are becoming more common, according to employment agency Robert Half. Are there employee shuttles or vanpools, stipends for gas, or paid parking and public transit costs?
Other Perks
Ask about perks such as free lunches and snacks; on-site dry cleaning, medical care or haircuts; company cars; or discounts on products and services. If you'll have a company credit card that earns rewards, see if you can keep the points you accrue.
The Financial Costs of a New Job
A new job may also mean new expenses, especially if you've been working from home. U.S. workers report spending about twice as much per month when working on-site than at home—$863 vs. $432, according to employer technology firm Owl Labs. Consider these potential costs.
- Food: In-office workers spend an average of $14.25 per day on lunch, Owl Labs found, while grabbing breakfast costs an average of $8.46.
- Commuting: In addition to fuel, tolls, parking or public transit, consider increased wear and tear on your car. Higher mileage could increase your car insurance premiums too.
- Clothing: Does the job require new clothes or formal outfits that need dry cleaning?
- Relocation: If the new job means a move, you'll face moving expenses unless your employer covers relocation.
How to Decide if a Job Offer Is Right for You
You should get all the details of your job offer in a contract or offer letter. Read it carefully and clarify anything you don't understand.
Compare the salary and benefits to those of your current job, and be ready to make some tradeoffs. You may decide that retirement benefits make up for a longer commute, or that a clear path for advancement offsets a lower salary.
How to Negotiate for a Better Offer
If you like a job offer, but think it could be better, try negotiating.
- Start with salary. Your salary is the starting point for any future raises, bonuses or other financial bumps, so try to get the best possible offer.
- Be prepared. Visit Glassdoor, Payscale or Salary.com to find average salaries for your job, experience and location.
- Know your options. Look at similar job postings to see what benefits competing companies offer.
- Be flexible. If you're unable to negotiate a higher salary, try to ask for better benefits or perks, such as more PTO or remote work a few days a week.
You can also leverage a job offer to improve your situation at your current job. Use the offer and salary data you've gathered to ask for a raise or better benefits. Just be ready to take the other offer if your current employer refuses.
The Bottom Line
Once you've accepted a new job, revise your budget and consider how best to use your increased income. Putting your extra money toward an emergency fund, retirement savings or paying down debt can help prevent lifestyle creep and get you closer to your financial goals.
Making more money can reduce your debt-to-income ratio, make it easier to pay bills on time and lower your credit utilization ratio, all of which can boost your credit score. While you're making all these changes, consider signing up for free credit monitoring from Experian to keep an eye on your credit.