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?

Question

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?

• Company A because the total compensation is higher.
• Company A because the salary is likely to increase later.
• Company B because most people do not need dental benefits.
• Company B because the salary is higher.

Answer 1

The better offer in terms of total compensation is Company A. Even though Company B offers a higher salary, when you factor in the value of the benefits and retirement contributions, Company A actually offers a higher total compensation package. Additionally, Company A provides dental benefits which can be valuable to some individuals. Finally, the potential for a salary increase in the future at Company A also makes it a more attractive offer in the long term.