How to compare two job offers properly
The short answer: don't compare headline salaries. Compare what each job is worth to you: take-home pay, plus employer pension, minus the cost of getting to work, plus the value of extra holiday and benefits. A lower salary can easily win once you do.
Step 1: compare take-home, not gross
Tax takes more of each pound as your salary rises. A £3,000 difference in salary is not a £3,000 difference in your bank account. With tax, National Insurance and the pension contributions below, Offer A pays £42,000 and Offer B £39,000, but the take-home gap is only £1,884 a year.
Watch the thresholds. A salary that takes you over £50,270 (higher-rate tax), £60,000 (Child Benefit charge) or £100,000 (losing your Personal Allowance) can leave you with much less of the rise than you expect. See pay rise thresholds that cost you.
Step 2: add the employer pension
This is where offers differ most. The legal minimum is 3% of your pay between £6,240 and £50,270. Many employers pay 5% to 10% of your full salary, and public sector schemes are worth far more. In our example:
- Offer A pays the 3% minimum on qualifying earnings: £1,073 a year.
- Offer B pays 8% of the full salary through salary sacrifice: £3,120 a year.
Salary sacrifice also saves you National Insurance on your own contributions, which is part of why Offer B's take-home is closer than the salaries suggest. See what employer pension matching is worth.
Step 3: take off the cost of getting there
Offer A needs you in the office five days a week, at about £150 a month in fares. Offer B is hybrid, two days a week, about £60. That is £1,080 a year, paid from taxed income. Add parking, lunches bought near the office and childcare for longer days if they apply to you. Time matters too: an extra hour a day of commuting is about 230 hours a year.
Step 4: value the holiday
Offer B gives 30 days to Offer A's 25. A rough value for each day is the salary divided by 260 working days, so five extra days on £39,000 are worth about £750. If you would take unpaid leave anyway, the extra days are worth even more.
The two offers side by side
| Offer A | Offer B | |
|---|---|---|
| Salary | £42,000 | £39,000 |
| Take-home a year | £32,080 | £30,196 |
| Travel costs | −£1,800 | −£720 |
| Employer pension | +£1,073 | +£3,120 |
| Extra holiday value | £0 | +£750 |
| Worth to you a year | £31,352 | £33,346 |
Offer A pays £3,000 more, but Offer B is worth about £1,993 a year more once everything is counted. Run your own figures in the job offer calculator.
Step 5: the benefits that are harder to price
- Bonus: count only what is likely, not the maximum. Check how it was paid in recent years.
- Sick pay: full pay for months is worth a lot compared with Statutory Sick Pay. See company sick pay.
- Enhanced parental pay can be worth thousands if you plan a family.
- Private medical, life cover and a car allowance: most are taxable benefits, so you pay tax on their value.
- Training, progression and pay scales: a job with automatic pay steps can overtake a higher starting salary within a few years.
- Security and flexibility: permanent vs fixed term, notice periods and the right to work from home.
Using the numbers to negotiate
If you prefer the job that pays less, tell them, with figures. "Your offer is worth about £31,352 a year to me once I include pension and travel; the other is about £33,346. Could you close some of that gap?" Employers can often move on pension, holiday or a start bonus more easily than on salary. See how to ask for a pay rise.
Related reading: what counts as a good salary in the UK.
The example uses made-up offers and 2026/27 tax rates. Your own tax code, student loan and pension type will change the figures.
Sources
Common questions
How do you compare two job offers fairly?
Turn each offer into the same terms: take-home pay, plus your employer’s pension contributions, minus the cost of getting to work, plus the value of extra holiday and benefits. Then weigh the things money cannot measure, like progression and flexibility.
Is a higher salary always better?
No. Tax takes a bigger share of each extra pound as you earn more, and a lower salary with a much better pension, more holiday or a shorter commute can leave you better off.
How much is an employer pension contribution worth?
Every pound your employer pays in is a pound you would otherwise have to save from taxed pay. 5% extra on a £40,000 salary is £2,000 a year into your pension.
How do I value extra holiday?
Divide the salary by about 260 working days. Each extra day of paid leave is worth roughly that much. On £39,000, five extra days are worth about £750.
Should I count the commute?
Yes. Season tickets, fuel, parking and the time you spend travelling are real costs. A job that needs you in five days a week can cost thousands more a year than a hybrid one.
Can I use one offer to negotiate the other?
Yes, politely and with numbers. Show what the gap is worth in take-home or pension terms and ask whether they can close it, through salary, pension, holiday or a start bonus.