Worked example
A job paying £3,000 more can still have a lower real hourly value if it requires substantially more commuting, unpaid time and work expenses.
Frequently asked questions
Why include employer pension value?
Employer pension contributions are part of compensation even though they are not current take-home pay.
Should bonus be included?
If reasonably predictable, add the expected after-tax bonus to annual take-home pay.
Compare total value, not just salary
For each role, enter the take-home pay you reasonably expect, the paid weekly hours, recurring work costs and regular unpaid time such as commuting or routinely unpaid additional work. Employer pension value is included separately so long-term compensation is not ignored.
The resulting value per committed hour is a comparison measure rather than a wage-rate calculation. It is useful when one job pays more but also requires substantially more time or expense to access that pay.
Before choosing between offers, also compare
- job security, progression and expected future pay;
- annual leave, sick pay and other benefits;
- flexibility, home-working expectations and commute reliability;
- bonus assumptions and whether they are guaranteed.
A higher real hourly value does not automatically make a job better. It simply exposes the relationship between compensation, recurring costs and time so qualitative factors can be considered alongside it.