Personal Finance · Explainer
Reading a job offer as a financial product
Base salary is the headline. Pension matching, equity vesting and benefit costs decide what the offer is worth.
The short answer
- Employer pension matching is deferred pay that many candidates leave unclaimed.
- Equity is worth its vesting schedule and liquidity, not its stated value.
- Benefit premiums and commuting costs are a real reduction in net pay.
Two offers with identical base salaries can differ materially in value. Comparing them requires converting every component into an annual figure and subtracting the costs of accepting the job.
Deferred pay
An employer contribution to a pension is compensation with tax advantages attached. Where a match is conditional on the employee contributing, declining to contribute forfeits the match outright — the clearest unforced error in personal finance.
Equity has a schedule
A grant's headline number assumes full vesting and an eventual ability to sell. Cliff periods, multi-year vesting, leaver provisions and — in private companies — the absence of a market all reduce that. Ask what fraction is realisable, and when.
- Vesting length and any initial cliff.
- What happens to unvested awards on resignation or redundancy.
- Whether the shares are traded, and any lock-up or blackout rules.
- How and when tax falls due, which may precede any sale.
Costs of accepting
Employee premiums for health cover, commuting, relocation, required equipment and the value of leave days are all part of the calculation. So is the notice period, which determines the runway if the role ends.
Sources
- Retirement plan contribution rules — IRS
- Workplace pensions — GOV.UK
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