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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?

Responses

Company B because the salary is higher.

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.

1 answer

To determine which job offer is better in terms of total compensation, we need to calculate the total compensation for both Company A and Company B.

Company A:

  • Salary: $42,000
  • Other benefits (medical, dental, retirement contributions): $12,000
  • Total Compensation = $42,000 + $12,000 = $54,000

Company B:

  • Salary: $47,000
  • Other benefits (medical, retirement contributions): $5,000
  • Total Compensation = $47,000 + $5,000 = $52,000

Now, let's compare the total compensations:

  • Company A: $54,000
  • Company B: $52,000

Based on this calculation, Company A offers a higher total compensation of $54,000 compared to Company B's $52,000.

Therefore, the correct response is: Company A because the total compensation is higher.