What is a good salary? How to evaluate a job offer

When you get a job offer, the first number you see is the base salary. That number matters, but it is only one piece of the puzzle. A good salary depends on where you live, what benefits come with it, and how the total compensation package compares to your current situation.

What makes a salary good

A good salary covers your needs, supports your lifestyle, and allows you to save for the future. But that definition varies wildly by location. Earning $75,000 in rural Mississippi is very different from earning $75,000 in San Francisco. Cost of living adjustments are not optional when evaluating an offer.

Use a cost of living calculator to compare your current city to the one you are considering. If the new offer requires relocation, the salary needs to cover not just the new cost of living but also the disruption of moving.

Total compensation matters more than base salary

Your total compensation includes:

Base salary — The annual number you see in the offer letter. This is the foundation but not the full picture.

Bonuses — Annual performance bonuses, signing bonuses, and referral bonuses. A 10% target bonus adds $8,000 to an $80,000 salary.

Equity — Stock options or restricted stock units. At startups, equity can be worth nothing or can be life-changing. At public companies, equity is more predictable.

Retirement contributions — A 401(k) match is free money. If your employer matches 50% of your contributions up to 6% of your salary, that is worth up to $3,000 per year on a $100,000 salary if you max the match.

Insurance — Health, dental, vision, and life insurance vary enormously. A plan with a $500 deductible and low premiums is worth thousands more than a plan with a $5,000 deductible.

Paid time off — Three weeks of vacation versus two weeks is worth about 2% of your salary. Unlimited PTO sounds great but often results in people taking less time off.

Other perks — Remote work, commuter benefits, gym memberships, education stipends, and meal subsidies all add value.

How to compare two offers

Create a spreadsheet with every component of each offer. Assign a dollar value to each benefit. A 401(k) match worth $3,000 is real money. An extra week of vacation is worth roughly 2% of your salary. Better health insurance might be worth $2,000-5,000 per year.

When you total everything, the offer with the higher base salary might not be the better offer. A job paying $90,000 with poor benefits could be worth less than a job paying $80,000 with excellent benefits.

The most important factor: growth potential

The best predictor of your future earnings is not your starting salary. It is the growth trajectory of the role. A job that pays $70,000 but teaches you valuable skills and promotes quickly is better than a job that pays $80,000 with no growth path.

Look at where people in the role end up after 2-3 years. Ask about promotion timelines and typical salary increases. A job with 10% annual salary growth will outpace a job with 3% growth within a few years.

How to negotiate

Most employers expect you to negotiate. The worst they can say is no. Research the market rate for your role using salary data from industry surveys. When you make your case, focus on the value you bring, not what you need.

The best time to negotiate is after you have an offer but before you accept. At that point, the employer has decided they want you. A few extra thousand dollars is usually worth it to them to close the deal.

When to say no

Not every offer is worth taking. If the salary is too low to cover your basic needs, the benefits are poor, or the company culture is toxic, walk away. A bad job at a higher salary is still a bad job.

Use the Paycheck Calculator to see exactly how much of your salary you will take home after taxes, insurance, and retirement contributions. The number in your bank account is what ultimately matters.

Frequently asked questions