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Better Off Formula:
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The Better Off calculation compares your potential new income against your current income to determine the financial benefit of a job change or promotion. It provides a simple way to quantify the monetary advantage of a new employment opportunity.
The calculator uses the simple formula:
Where:
Explanation: A positive result indicates you would be financially better off with the new opportunity, while a negative result suggests you would earn less than your current situation.
Details: This calculation helps in making informed career decisions by quantifying the direct financial impact of changing jobs or accepting a promotion. It serves as a baseline for comparing opportunities.
Tips: Enter both incomes in USD. For accurate comparison, use annualized figures including base salary and guaranteed bonuses. Consider other benefits (healthcare, retirement, etc.) separately.
Q1: Should I consider taxes in this calculation?
A: This calculator shows gross difference. For net difference, you would need to account for tax implications which vary by location and individual circumstances.
Q2: What about non-salary benefits?
A: This calculator focuses on direct income. You should evaluate benefits like health insurance, retirement contributions, and bonuses separately.
Q3: How often should I do this calculation?
A: Whenever considering a job change or promotion, or annually to assess your market value.
Q4: Is a higher "better off" amount always better?
A: While important, also consider job satisfaction, career growth, work-life balance, and other non-monetary factors.
Q5: Should I include potential bonuses?
A: Only include guaranteed bonuses. For variable compensation, you might want to run different scenarios.