Omar is offered a job with Company A for a salary of $42,000. He gets medical benefits, dental benefits, and contributions to his retirement worth $12,000 a year. At the same time, Company B offers him a job with a salary of $47,000. This job comes with medical benefits and contributions to his retirement worth $5,000. Both provide two-weeks paid vacation. Which is the better offer in terms of total compensation?
A. Company B because the salary is higher.
B. Company A because the total compensation is higher.
C. Company A because the salary is likely to increase later.
D. Company B because most people do not need dental benefits.
To determine which offer is better in terms of total compensation, we need to add up the salary and benefits for each job.
For Company A:
Salary = $42,000
Medical benefits = $12,000
Dental benefits = $0 (not mentioned)
Contributions to retirement = $12,000
Total compensation = $42,000 + $12,000 + $0 + $12,000 = $66,000
For Company B:
Salary = $47,000
Medical benefits = $0 (not mentioned)
Dental benefits = $0 (not mentioned)
Contributions to retirement = $5,000
Total compensation = $47,000 + $0 + $0 + $5,000 = $52,000
Therefore, the better offer in terms of total compensation is Company A (B option).