How to Compare Two Job Offers in Canada

Start with take-home pay, not just gross salary

Job offers are usually presented as gross salary, but gross salary is not the amount that reaches your bank account. Federal and provincial or territorial income taxes reduce employment income, along with statutory payroll deductions such as CPP or QPP and Employment Insurance.

This becomes especially important when the two jobs are located in different provinces. Two offers with similar gross salaries can produce different estimated take-home amounts because provincial and territorial tax systems are not identical.

What should you compare between two job offers?

Why comparing salary alone can be misleading

Imagine receiving one offer for $70,000 per year and another for $80,000 per year. The $80,000 offer clearly has the higher gross salary, but the useful question is how much of that difference remains after estimated taxes and statutory deductions.

A take-home comparison puts both offers on the same basis and makes it easier to understand how much additional spendable income one offer may provide.

Annual salary and pay frequency are different things

An employer might quote a salary annually while paying employees every two weeks. Another employer may describe compensation using a monthly, weekly or per-pay amount.

For a useful comparison, first annualize the quoted compensation. Then use the employer's actual pay schedule when estimating the amount received per paycheque.

OfferWorth keeps these concepts separate: Amount frequency describes how the offer was quoted, while Pay schedule describes how often the employer actually pays you.

Taxes are only part of a job-offer decision

Take-home pay is useful, but it should not be the only factor in a career decision. Employer pension or RRSP matching, health and dental benefits, bonuses, vacation, remote-work arrangements, commuting costs, working hours and career opportunities can all affect the real value of an offer.

Cost of living can also matter when offers require living in different cities. A higher take-home salary may not automatically translate into greater disposable income if housing and other expenses are substantially different.