When is a $10,000 raise a pay cut?

It’s important to know what you’re getting yourself into when accepting a new job. As a mentor of mine once said, “don’t be seduced by the job offer.” It’s very exciting to receive an offer, especially if you’ve been looking for a long time. But if you are choosing between different offers, or have an existing job and are deciding whether to accept a new one, consider whether a new job is actually an improvement on your current situation. Things to consider:

* What are the benefits offered? The cost of health insurance and other benefits can cut so deeply into your take-home pay that any increase in salary won’t be offset by increased costs. Does the new job offer health benefits, and if so, what is the premium, co-pay, and deductible? These things can really add up. Other benefits can make a huge difference, especially things like tuition remission or retirement benefits. Use paycheckcity.com to calculate what your actual take-home paycheck will be.

* What about paid time off? An hourly wage job often doesn’t include vacation or sick time. This can be a huge issue if and when you need time off, and can reduce your bottom line.

* Work-life balance is another issue that can drastically affect your calculation of how much you’re really earning per hour worked. I used to help many a college grad to land a job in certain industries (like investment banking) where I was astonished at how much they would be paid right out of undergrad– until I realized they would be earning just about minimum wage, considering the number of hours they were expected to work.

* If you’re moving, you have to consider the cost of living differences, but you have to go beyond simple calculators that you can find online that tell you whether a new city is more expensive, but also understand that some states have greatly increased tax rates compared with others (paycheckcity can help with this too– as can this article about states with the highest and lowest tax burdens).

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