Sure, it’s important to be fulfilled at your job, but you also want to be fairly compensated for your work. Calculating your salary can also help you decide between two job offers. In today’s job market, employers are willing to compensate those who have the experience and skills that they need. Plus, it is becoming increasingly common to negotiate an initial a job offer. Whether you’re job hunting or climbing the ladder, you should absolutely know your worth.
Calculate salary with these 6 easy-to-follow steps:
1. Assess: First, think holistically about what you need to earn. Is your career is on track to support the lifestyle you are currently living as well as the way you want to live in the future? Do you want to buy a house? Spend time traveling? Pay off student loans? Save for your children’s college?
2. Calculate: Run the numbers to figure out your expenses. Create a spreadsheet with a list of line items on your budget that include housing, insurance, food, car payments, utilities, discretionary expenses and savings. Add up your monthly expenses and annualize this number by multiplying by 12. This calculation will help you figure out how much you need to earn each year to maintain your lifestyle. Living paycheck to paycheck? That’s a red flag to either lower your expenses or increase your income.
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3. Research: Now that you understand what you need, you can determine what you’re “worth” and if you’ve got the right skillset to earn what you’d like. Keep in mind that salaries for the same job do vary by region to reflect the cost of living in a particular area. Certain positions and skills are more in demand than others too, and this is reflected in the high salaries and what companies are willing to pay. You can use Glassdoor to figure out what the average salary for your position is in your area. Also, make a list of your accomplishments at work to determine if you’re meeting the expectations of your position. You want to assess where you are with the demands of your position.
4. Train: Depending on where you fall and if that’s above or below the average will help you figure out if it’s time to ask for more or whether you need to refine your skillset to become more marketable. If you lack certain key skills and your salary is lower than average, there are inexpensive ways to learn these. Look at online courses or videos, for example, or ask for a training class at work.
5. Evaluate: Remember that salary isn’t just about the number of zeros on your paycheck. Consider the benefits and perks. You may have excellent health care, substantial vacation time and a great match on your 401(k)—these are also part of your compensation and should be factored into the equation.
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6. Negotiate: In some industries, companies don’t adjust salaries to the market rate. If you feel you’re underpaid for what you deliver, then consider negotiating for more. Remember, in addition to negotiating salary, you can negotiate vacation, title, and even some benefits like expense reimbursement and working from home.
If you have determined that you are being underpaid, now’s the time to turn your preparation into action and negotiate your salary with confidence!