Financial considerations when evaluating a new job offer

You’ve run the gauntlet, beat the competition, and the opportunity is right in front of you. It’s an exciting time, whether it’s your first role or your next rung on the career ladder.

Your focus shouldn’t just be on the salary, take the time to assess all the financial factors that impact long-term stability and career growth. We’ll break down key considerations, such as compensation, benefits, taxes, and cost of living. By understanding the whole financial picture, you can ensure your next move fits with both your career goals and financial well-being.

Financial considerations to make before accepting job offer

Signing on to a new role is a big decision. The considerations listed here are just some of the many that can play a part in making or breaking a job offer.

Understand the employee benefits thoroughly

Benefits are a major factor for many people in deciding to take or reject a job. Work-related education, health and wellbeing perks like discounted gym memberships, social initiatives, and, depending on the industry, fringe benefits like a car allowance are common benefits brought into the conversation to encourage prospects to join a company.

Employee health benefits

Explore the health coverage and wellness perks offered by the employer and consider how they align with your needs. Most health benefits include discounted gym memberships, reduced rates on private health insurance, or occasional onsite fitness or yoga classes.

An employer who provides access to discounted or subsidised private healthcare can help you save significantly.

Employee retirement benefits

Dedicated employee retirement benefits aren’t common in Australia beyond the mandatory superannuation system.

Employers are legally required to contribute a percentage of an employee’s earnings (currently 11%) to a superannuation fund, which serves as the primary means of saving for retirement. Some employers may offer additional contributions or salary sacrifice options, but it's rare for Australian workplaces to provide separate retirement benefit schemes like pensions or matched retirement plans found in other countries.

Fringe benefits

Fringe benefits are additional perks employers provide that can add significant value beyond your base salary. Common examples include car, phone, and internet allowances, as well as working from home (WFH) allowances to cover home office expenses. Some employers also offer rostered days off (RDOs), which provide an extra day off, often every fortnight or month depending on work hours. Other valuable benefits may include study leave for professional development.

For instance, a financial planning and analysis firm might offer funding for courses in data management, while a mining company might allow time off to focus on safety training. Occasional half-days are sometimes another benefit that employers offer. This could be one Friday afternoon off per month for example. These extras help to improve work-life balance and reduce a company’s out-of-pocket expenses.

Additional benefits

In addition to salary and standard entitlements and fringe benefits, many employers offer a range of additional benefits that enhance work-life balance and overall job satisfaction. These can include things like flexible working hours, the option to work remotely, extra annual leave days, or birthday leave.

Understanding and negotiating these benefits can play a significant role in shaping a positive work environment and a successful business.

Identify expenses associated with the role

Jobs cannot exist in a vacuum, as much as some employers might wish they could. A role with a competitive salary might require a frequent commute that incurs high costs and travel time, while another might have a WFH (work from home) arrangement that could save you time and money.

Identify your ambitions and how the role can support them

Are you planning to move locations soon? Do you have a desire to purchase a car or home? What career goals do you have set for yourself? All these questions, along with others about your future, need to be thought about when considering a job opportunity. If the salary can support these aspirations, it can be much more rewarding in the future.

If what’s on offer doesn’t meet your personal needs, you should reconsider or negotiate a better deal before you sign on. Since some companies don’t do formal end-of-year reviews for employees who were just hired, your next opportunity to negotiate your compensation may not come until over a year after you were first employed.

Building good financial habits

To really maximise your personal situation, don’t just rely on what a job can offer you. Instead, spend time creating some good financial habits that will set you up for success when you stand out from the competition and land that new role. These simple practices will help you make the most of your money and reach the goals you set for yourself consistently.

Start building your emergency fund

An emergency fund is an essential part of your finances. It will be a true lifeline in the case of unforeseen expenses or changes in circumstances. Even the most successful business can run afoul of hard times, so don’t put all your eggs in one basket.

A good rule of thumb is to have at least three months of expenses set aside as a fund, ensuring you can pay for your standard of living in the event of a loss of income.

Set up a savings goal

Small additions to a savings pot each payday will quickly build up and become a meaningful amount of money to help you. Furthermore, as your savings pot grows, so does the interest you receive on that, making your efforts go even further.

Securing a dream job is among the best feelings in the world. It’s a competitive environment across many industries, and it can be tempting to just say ‘yes’ at the first offer.

But slow down, and be honest about the compensation you’re receiving for the hard work put in. Do the benefits match those of the industry? Can you afford to take the role and meet your financial obligations?

All these questions need to be answered affirmatively before you sign on the dotted line. Very few jobs will be completely perfect, but taking the time to consider things will put you in good stead for your professional growth.