[hl0m4n]

so here is an interesting one ...

i love my current job and make about $67k a year. i got offered a better job with different company but there are some offsets.

current job:
-$67k a year
-maxed 401k contribution at $17k year
-health insurance

new job:
- $ ? a year
- no 401k plan
- no health insurance

maxing out 401k contribution puts me at a lower tax bracket and with the new job not having one, i will be taxed on full income with no side deductions in addition to not putting any money away.

no health insurance is also a concern. different health plans quoted me $200-400 a month depending on plan, deductibles, etc.

based on these known facts, what would be an appropriate salary for my new job? the jobs are pretty much same in position so no variance there.

[UncleWede]

No "match on the 401k? You can do your own on the outside with a small offset since the money goes into your pocket first.
2-400 x 12 = 24-4800 more you need to break even on insurance.

What other things would make you consider the new offer? Closer to home, better company reputation, . . .?

[hl0m4n]

^ thanks for input.

the new company does not offer a 401k plan and im not too certain on how a 401k works if i were to do it myself. im assuming the max contribution works differently as well.

the job is pretty much set in stone besides my new salary. other factors like company rep, commute, etc are all better as well.

[335m]

I would ask for 75k, depending on how long you have been working at your current job you are probably worth more than they are paying you in the first place.

That's how Software Engineering is for me at least.

[grieverr]

On the surface it doesn't look appealing. The salary is important - you have to know before you make any decision. Paying for health insurance out of pocket is something you need to consider.

You can't do an independent 401k, if I'm not mistaken. You'd have to enroll in some form of IRA, in which your contributions are not pre-tax. So you'll lose the benefit of being in a lower tax bracket.

So the big question, what will you gain from the other job? Better chance of growth? more freedom? Working on something you'd love? Better company, commute, perks?

[jlstyle]

How can you be offered with out a salary?
That's the first thing in line with a new job.
If I were you, unless it's a much better company (but not sure since no benefits are given) or at least 20% raise in salary.

[FC4]

$195K

[hl0m4n]

the company wants me to get back to them with a salary i deem appropriate. puts all initial pressure on me. all previous jobs i would be given an offer and work from there.

forgot to mention another factor. my current job is stable but no room for growth. this new job is a 20 month contract with room for growth and a much better company without the benefits i mentioned (health & 401k).

i am young, single, & no kids which plays a big role in my decision but reading all your comments im starting to second guess my decision...

commute is better but not a deal breaker but a big plus on the new job is my hours & having normal holidays through the year.

[grieverr]

Do they know your current salary? Are you in software engineering? will you be a contractor? Ask for something ridiculous and see what they say

I'd say, 20 month contract with no guarantee of future employment (no matter what they say, this is the reality), no benefits, at a bigger, better company? Ask for $90k and let them talk you down to mid 80's.

[upstatedoc]

Originally Posted by hl0m4n

i love my current job and make about $67k a year.

I think this says it all. I took a lesser paying job for more family time. That can't be replaced.

[grieverr]

Originally Posted by upstatedoc

I think this says it all. I took a lesser paying job for more family time. That can't be replaced.

He's young, he may not prioritize that. But for the record, I agree with you 100% and have done the same.

As I get older, "be happy" is much more important than just how much one can potentially earn.

[dreamingat30fps]

Originally Posted by grieverr

He's young, he may not prioritize that. But for the record, I agree with you 100% and have done the same.

As I get older, "be happy" is much more important than just how much one can potentially earn.

I recently turned down a job paying significantly more than I make now because of this (and partially because I think there's the opportunity to make more where I am). However when I first started working I probably switched jobs every year or so. Each jump making a bit more.

It's hard for us to judge how much "better" the new job is. However you say you love your current job so. Just based on the info here I would consider it if it was in the 90s.

[gatorfast]

You put $17k into a 401k making only $67k??? Do you live at home or something? How do you have money to live?

[hl0m4n]

^ thanks everyone for the input... i got the offer yesterday and still have a lot of thinking to do; running on emotions and impulses right now.

when i say "love" my job, i really mean the work i do and the industry i am in. i hate my hours as it is retail. i work every sat (miss this the most), barely no holidays/day off, and lots of hours.

i will be working same industry but for corporate as a 20 month contracted employee. it will be a regular 9-5 monday through friday and all holidays through calender year with 13 personal days a year.

in addition although nothing is a guarantee, i know that working as a contracted employee is best chance to transition to a full time corporate position.

to sum, my main motivation on moving is the possible transition to full time corporate and the hours (biggest deciding factor).

but comes the offsets mentioned above (no health insurance & 401k).

at the moment, i want to move to the new job but need to think of a salary where everything balances out for me and is right to present to company.

current stable job with no progression or take a risk with new job and potential progression in addition to the normal work hours i miss dearly.

that is my dilemma...

gator you bring up a good point and simple answer is i get subsidized.

Originally Posted by dreamingat30fps

I recently turned down a job paying significantly more than I make now because of this (and partially because I think there's the opportunity to make more where I am). However when I first started working I probably switched jobs every year or so. Each jump making a bit more.

It's hard for us to judge how much "better" the new job is. However you say you love your current job so. Just based on the info here I would consider it if it was in the 90s.

the salary would have to be in the 90s to make it worthwhile

[ddk632]

There is no such thing as salary on a contract.

Note - you will be a W2 or 1099 contractor? If 1099, your rate needs to compensate for the extra 7.5% income tax you will pay for self-employment.

I would say $45-$50/hr on a contract will be worthwhile but less than that is pretty muddy. $45/hr on W2, at least $50/hr for 1099.

Also note that on contracts there is potential to bill more than 40hrs/wk if approved, thereby further increasing income opportunities. With salary, this is not possible.

[hl0m4n]

^ddk good point on the contract salary. indeed i will be paid hourly but just referring to salary as that's being requested by the hire. it is also indeed w2.

although there is extra income potential working overtime, the company really keeps an eye on this and any overtime gained won't be much.

keep the feed back coming guys, i am learning a lot and taking everything into account. thank you .

[grieverr]

Originally Posted by hl0m4n

it will be a regular 9-5 monday through friday and all holidays through calender year with 13 personal days a year.

in addition although nothing is a guarantee, i know that working as a contracted employee is best chance to transition to a full time corporate position.

In my opinion, this changes things. A schedule change can be important and life changing (I know it sounds dramatic, but it's true). I'd certainly consider this now, regardless of the money. Also, the move to corporate is important, too (if that's where you want to go). So you're looking at 2 fairly major changes in a positive direction.

So I would retract what I said about asking for ridiculous pay. If this is something you're really considering, then don't price yourself out. Is there anyone in that management you can talk to "off the record" and ask for advice?

Tough choice, good luck! Update the thread with your decision.

[powerhouse_b]

Well since you'll be on W2, you won't get paid for those 13 day off.
You won't be able to continue contributing to your 401k, and the IRA that you can set up will have a 5.5k maximum contribution per year. So expect to pay 3k+ more on taxes just because you are not contributing as much to retirement. Plus 2-4k health insurance.

[MFL]

You have to live at home, lol. Your car costs like twice as much as you make a year after taxes.

[Nkc]

Originally Posted by MFL

You have to live at home, lol. Your car costs like twice as much as you make a year after taxes.

Who doesn't live at home? Do you live in a place that's not home to you?

[ddk632]

Originally Posted by powerhouse_b

Well since you'll be on W2, you won't get paid for those 13 day off.
You won't be able to continue contributing to your 401k, and the IRA that you can set up will have a 5.5k maximum contribution per year. So expect to pay 3k+ more on taxes just because you are not contributing as much to retirement. Plus 2-4k health insurance.

Contract is contract. W2 contract is the same as a 1099 contract but the benefit on W2 is the employer is paying your self-employment tax. Neither one gets paid vacation or sick days. Neither one gets a 401k, nor insurance.

On a 1099, however, you can deduct more. Don't quote me on that but I am pretty sure this is the case. Remember, W2 means you're an employee. Contract or not you're an employee. 1099 you work for yourself and that allows for more deductions of expenses.

This is part of what everyone is telling OP. To compensate for the higher taxes and out of pocket insurance, and still actually feel like OP makes more money, a $20k - $25k annual jump in gross income from salaried employee to contractor (any kind) is minimally necessary. That means after taxes and costs, he sees maybe $10k+/yr more net. That is a noticeable bump.

There is a reason contract rates tend to be higher than their equivalent salaried employee counterparts. There are more costs, more risks, less perceived security, higher turnover rates, and shorter overall gigs than full time jobs. There are also risks of being unemployed between contracts.

One must not shortchange themselves in such a jump and take all this into account. Don't be afraid to ask for what you're worth or what you want. Within reason of course, forget that guy who posted $195k a while back. That being said, it is a negotiation, and you will never get that which you do not ask for.

True, there is opportunity cost of not contributing to the 401k (particularly if you're leaving a fully vested company match on the table) but that money can be invested in IRA and Roth IRA, so not a huge deal. 401k is pre tax now but you pay tax when you cash out; Roth IRA is post-tax but you pay no tax on gains when you cash out eventually. There is always a trade off so it's hard to fully quantify this type of thing.

Hence, from a pure income perspective, unless there is some serious benefit such as better career growth and potential, more family time, hated your old job and no longer to be miserable, etc., a lateral jump (net to net after factoring in taxes and extra out of pocket expenses) usually doesn't make sense. Some bump in income is warranted in most cases.

There are quantifiable aspects to a job move and there are qualitative aspects to same; only the person in question can accurately assess the value of the intangible qualitative aspects as they fit to his or her situation to determine if a lateral jump is worth making.

I've made a lateral jump before, but it was a career move which got me working with newer technology in my industry in a more demanding slice of the field, and has proven to pay dividends in growth in years since.

You wouldn't think that being a Professional Orangeer makes that much of a difference as opposed to a Professional Carrot Juicer; same field, different fruit/vegetable. If not for that move, I'd never have grown into my own Orange Stand and the financial security that comes forthwith.