How to Evaluate a Tech Job Offer: Total Compensation Explained

Two offers land in the same week. One has a higher base salary. The other has more stock, a better 401(k) match and a manager you liked. Which one actually pays more, and which is the better job?

Tech offers are hard to compare because so much of the value sits outside the paycheck. This guide breaks total compensation into its parts, explains how each one works and gives you a side-by-side worksheet you can fill in.

This is general information, not tax, legal or financial advice. For decisions about equity and taxes, talk to a qualified tax professional.

What total compensation means

Total compensation is everything of value the employer provides in a year. For most tech roles it has 6 parts:

1. Base salary: guaranteed pay.
2. Cash bonus: a target percentage of base, often tied to company and individual performance.
3. Equity: restricted stock units (RSUs), stock options or employee stock purchase plans.
4. Sign-on bonus: one-time cash, sometimes with a clawback if you leave early.
5. Retirement benefits: employer 401(k) match or contributions.
6. Health and other benefits: insurance subsidies, HSA contributions, paid time off, learning budgets and perks.

Recruiters often quote “total compensation” as base plus bonus target plus 1 year of equity. That’s a fair starting point, but you need to check each piece yourself.

Base salary and bonus

Base salary is the most certain number in the offer, so weigh it heavily. Check it against the posted range and market data, as covered in our guide on how to negotiate a tech salary.

For bonuses, ask:

• What’s the target percentage, and what did employees at this level actually receive last year?
• Is it paid annually or quarterly?
• Is the first year prorated by start date?
• What happens if you leave before it’s paid?

Treat a bonus target as likely but not guaranteed. A conservative approach is to count it at less than 100% in your comparison if the company’s recent payouts have been below target.

Equity: RSUs, options and ESPPs

Equity can be the largest piece of a tech offer, and the most confusing.

A few rules worth knowing:

• Vesting schedules vary. A 4-year schedule with a 1-year cliff is common, meaning nothing vests until your first anniversary. Some companies front-load or back-load vesting, which changes your yearly pay a lot.
• Section 423 ESPPs can offer a purchase price as low as 85% of fair market value, and the tax code caps purchases at $25,000 of stock value per calendar year, measured at the grant date.
• ISOs and qualified ESPP shares generally aren’t taxed when granted or exercised under regular tax rules, according to the IRS, but exercising ISOs can trigger the alternative minimum tax and sale timing affects how gains are taxed.
• The 83(b) election for restricted stock must be filed with the IRS within 30 days of the transfer. Missing the deadline can’t be fixed later.

For private startups, treat equity as high risk. Shares may be hard to sell for years, and a valuation is not cash. Ask what percentage of the company your grant represents, the latest preferred share price and the post-termination exercise window. For definitions of terms like strike price and dilution, see our glossary.

Key takeaway: Value public-company RSUs at today’s share price divided across the vesting years, then apply a discount if you’re cautious. Value private-company options conservatively, and never let them make up for a base salary you can’t live on.

Retirement and health benefits

These are easy to skip and can be worth thousands of dollars a year.

401(k) match. For 2026, the IRS employee contribution limit for 401(k) plans is $24,500, with an $8,000 catch-up for people 50 and older and a higher $11,250 catch-up for ages 60 to 63. Employer matches don’t count toward your $24,500 limit, though combined contributions face an overall cap. Ask:

• What’s the match formula (for example, 100% of the first 4% you contribute)?
• Does the match vest immediately or over several years?
• Is there a Roth 401(k) option or after-tax contributions?

Health insurance. Compare your monthly premium, deductible and out-of-pocket maximum, not just the plan names. A plan with a lower premium but a much higher deductible can cost more if you use care often.

HSA contributions. If you choose a high-deductible plan, many employers contribute to a health savings account. For 2026, the IRS limit on total HSA contributions is $4,400 for self-only coverage and $8,750 for family coverage, and employer money counts toward those limits.

Other benefits: paid time off, parental leave, disability insurance, life insurance, a learning or certification budget, home-office stipends and commuter benefits.

The side-by-side offer worksheet

Fill in 1 column per offer. The numbers below are a hypothetical example for illustration.

In this example, Offer A looks better in the recruiter’s headline number, but Offer B is ahead from year 2 onward. That’s a common pattern when one offer leans on a sign-on bonus.

The factors money doesn’t capture

A 5% pay difference rarely matters as much as these:

• Level. A higher level raises your pay band, equity refreshes and future offers.
• Manager and team. Your manager shapes your projects, growth and day-to-day happiness. Ask to meet them if you haven’t.
• Work you’ll do. Will the role build skills the market values? See our roundup of tech skills in demand.
• Work style. Remote, hybrid or in-office expectations; on-call load; typical hours. Our guide on how to avoid burnout in tech covers warning signs to ask about.
• Company health. Revenue trend, funding, recent layoffs and runway.
• Location and cost of living if relocation is involved.

Questions to ask before you accept

1. What’s the full equity grant, vesting schedule and refresh policy?
2. What did people at this level receive as bonus last year?
3. When is the first compensation review?
4. How are promotions decided, and how long do they usually take?
5. What’s the on-call expectation?
6. What’s the remote or hybrid policy, and has it changed recently?
7. Are there clawbacks on the sign-on bonus or relocation?
8. Can I see the benefits summary, including premiums by coverage tier?

Where to start

1. Ask each company for the full offer in writing, including the benefits summary.
2. Copy the worksheet above and fill in every row, including your premium costs.
3. Calculate year 1 and year 2+ totals separately.
4. Score the non-money factors 1 to 5 for each offer.
5. Use the gaps you find as leverage. A competing offer that’s stronger on equity is a reason to ask for more, as our salary negotiation guide explains.

Conclusion

Evaluating a job offer means looking past the base salary to the whole package: bonus, equity and how it vests, retirement and health benefits, and the growth the role gives you. Put every offer in the same worksheet, value equity cautiously and weigh level and manager heavily. The best offer is the one that pays fairly now and sets you up for the next step.

Sources

• IRS: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 — 2026 401(k) and catch-up limits
• IRS Publication 969: Health Savings Accounts — 2026 HSA contribution limits
• IRS Topic 427: Stock options — tax treatment of ISOs, ESPPs and nonstatutory options
• 26 U.S. Code § 423: Employee stock purchase plans — 85% minimum purchase price and $25,000 annual limit
• IRS Publication 525: Taxable and Nontaxable Income — restricted property and the 83(b) election