How the Job Offer True Pay calculator works
Updated November 2026
What true pay means
True pay is what a job really pays over a year once the parts around the salary are counted. The pension the employer adds is part of your pay even though it never lands in your bank account this month. The benefit premiums taken out of your pay and the commute you pay for are costs of holding that job. A salary on its own counts none of that, which is why two offers with close salaries can be far apart in true pay.
The formula, in plain words and symbols
Four steps, and the calculator above runs exactly these for each job:
Step 1: true yearly pay. true yearly pay = salary + employer pension amount - benefit premiums you pay - 12 x monthly commute cost.
Step 2: working weeks. working weeks = 52 - paid vacation weeks.
Step 3: hours actually worked. hours per year = working weeks x (contract hours per week + unpaid extra hours per week).
Step 4: true hourly pay. true hourly pay = true yearly pay / hours per year. Then the page compares the two jobs: yearly difference and hourly difference, offer minus current.
If the costs you type are bigger than the salary plus the pension amount, the true pay figure goes below zero and the page shows that honest negative number instead of hiding it.
A worked example
Take the numbers this calculator opens with. Current job: salary $70,000, employer adds $3,500 to the pension, you pay $1,200 in benefit premiums, commute $250 a month, 2 unpaid extra hours a week, 3 vacation weeks, contract 37.5 hours a week. The offer: salary $76,000, employer adds $2,280, you pay $1,800 in premiums, commute $420 a month, 5 unpaid extra hours a week, 2 vacation weeks, contract 40 hours a week.
Current job: $70,000 + $3,500 - $1,200 - 12 x $250 gives a true yearly pay of $69,300.00. Working weeks are 52 - 3 = 49, hours are 49 x (37.5 + 2) = 1,935.5, so true hourly pay is $35.80. Offer: $76,000 + $2,280 - $1,800 - 12 x $420 gives a true yearly pay of $71,440.00. Working weeks are 52 - 2 = 50, hours are 50 x (40 + 5) = 2,250, so true hourly pay is $31.75.
So the offer pays $2,140.00 more per year, and $4.05 less per hour worked. Both numbers are true at once. The offer asks for 314.5 more hours a year, and that is where the extra yearly money comes from.
How to read your result
The yearly difference is the headline: how much more, or less, the offer puts in your hands over a full year on the numbers counted here. A gap within 2 percent either way is close enough that this page calls it about the same. The hourly difference is the second lens: what each hour you actually give the job pays. When the two lenses disagree, as in the example, the choice is really about time: more money for more hours, at a lower rate per hour.
What the math takes as given, and what it leaves out
The math trusts the numbers you type. It does not count bonuses, signing bonuses, equity or overtime pay, and it does not add tax. It puts no cash value on the benefits themselves or on vacation time; vacation counts only as weeks you are not at work. It compares exactly two jobs. For a full offer letter with bonus and equity lines, the paid spreadsheet in the panel above is the wider tool.
Read more: total compensation beats salary
The Kollaz Money guide Job Offer Comparison Spreadsheet: Total Comp Wins, Not Salary walks through the same idea with the full package, including how bonus and equity lines change the picture.
Sources
- The method is plain arithmetic with no external constants: salary plus the employer pension amount, minus the benefit premiums you pay and twelve months of commute, split over the hours you actually work. It matches the paid workbook description in the Kollaz catalog (KM-034, checked 2026-11-10): offers lined up side by side on base, bonus, signing bonus, equity with its vesting, retirement match, benefits value and time off, with time off shown for reference and never converted to cash.
- The 2 percent band used to sort results into tiers on this page is a house display rule for this tool only, recorded in the build notes. It is not a benchmark, not a recommendation and not advice.
- The commute field takes your own monthly estimate. No rate per kilometre or per mile is built into this tool, because your fuel, transit and parking costs are yours, not an average.
Educational information only, not financial advice. Consider a qualified professional for decisions about your specific situation.