How should I value benefits such as health insurance and employee stock purchase plans when I'm comparing jobs? I'd like a conversion to dollars so I can fairly compare them to jobs with only direct compensation.

My ESPP is a income taxable 15% discount on stock, up to $10k input / 6 months.

4 Answers 4


To fairly compare a comp-only job to a job that offers insurance, get a quote for health insurance. Call your local insurance broker and find out what it would cost. Because if you aren't getting insurance from your employer, you'll have to get it elsewhere.

If you get a quote on an HSA, don't forget to add in the annual deductible as part of the cost.

On the ESPP, I'd count it as zero. The rationale being that so much of your financial status is tied to your employer that you don't really want to tie up too much more in company stock. (I.e. Company hits hard times, stock tanks, and then they lay you off. Double whammy -- both your assets and income.) But given that I've only been employed by companies that no longer exist in their original form, my perspective may be warped.

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    I disagree about the ESPP, since I buy and immediately sell (basically pocketing the discount).
    – C. Ross
    Aug 10, 2010 at 12:34

It would depend on the health insurance that was being offered, and if it covers your family or just you.

We pay around $500-600 for individual health insurance for our employees (families cost north of 1500 a month). It's extremely expensive.

Provide more details on the stock purchase plan as well (it sounds to me like in that case you'd only be getting for free what it would cost to purchase the stock... but that's only $10-15, so negligible in this case.)


Employee Stock Purchase Plans (ESPPs) were heavily neutered by U.S. tax laws a few years ago, and many companies have cut them way back. While discounts of 15% were common a decade ago, now a company can only offer negligible discounts of 5% or less (tax free), and you can just as easily get that from fluctuations in the market.

These are the features to look for to determine if the ESPP is even worth the effort:

  • Lookback Windows where you pay the lower price of either the start or end of the period
  • Larger discounts than 5% (your company will be paying extra taxes)
  • Short purchase periods of 3 months or less.

As for a cash value, if a plan has at least one of those features, (and you believe the stock has real long term value), you still have to determine how much of your money you can afford to divert into stock. If the discount is 5%, the company is paying you an extra 5% on the money you put into the plan.

  • 15% is free money that you should take. Assuming company stability, buy a prudent amount that you can afford in your budget, then sell some after 2 years when it's qualifying. You're still supposed to pay ordinary income taxes on the 15%, but that's 15% extra money you made (plus qualifying dividends and long term capital gains).
    – SpecKK
    Aug 11, 2010 at 16:52
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    Don't be surprised if your employer drops this benefit down the road because "all of the other employers have," just like my company. Given the tenuous nature of this benefit, give it a lower value in your job offer comparison. It definitely has a cash value, but it's not a guarantee.
    – SpecKK
    Aug 11, 2010 at 16:54

Health insurance varies wildly per state and per plan and per provider - but check them out to have a baseline to know what it should cost if you did it yourself.

Don't forget vacation time, too: many contract/comp-only jobs have no vacation time - how much is that 10 or 15 days a year worth to you? It effectively means you're getting paid for 2080 hours, but working 2000 (with the 2 week number).

Is the comp-only offer allowing overtime, and will they approve it? Is the benefits-included job salaried? If it's truly likely you'll be working more than a normal 40 hour week on a routine basis (see if you can talk to other folks that work there), an offer that will pay overtime is likely going to be better than one that wouldn't .. but perhaps not in your setting if it also loses the PTO.

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