Using Salary Calculators

Using a salary calculator helps you evaluate just how good a new job offer is, or how well your current salary ranks with the industry standard. They’re a useful tool for salary negotiations for both new jobs, and for annual salary reviews in your current position.

Most salary calculators are easy to use—you just plug in your job and location, and the calculator will show you a graph or table that indicates the minimum, maximum and median salary for your position. Note that adding a location is important, as salaries are usually adjusted for cost-of-living, which varies from state to state.

It is important to be somewhat wary when using salary calculators—some experts believe they tend to display figures that are higher than what the market actually bears. Most salary calculators do not provide information about the size of the sample used in determining the figures, nor how the sample was chosen. This means it’s quite difficult to determine how accurate any given salary calculator is.

That’s not to say salary calculators are worthless—they’re definitely useful in generating a rough guide to what your position is worth. However, it’s important to keep in mind that there may be some inaccuracy. This is particularly true if you decide to find out just how much your position is worth and discover that the calculator you use shows that the average salary figure is higher than what you are being paid. In this situation it’s all too easy to feel that you’re not being paid what you’re worth, but that may not be the case.

Sometimes it can be more helpful to forgo the salary calculators and come up with a salary range using your own calculations. To do this, first calculate the level of income you need to maintain your current standard of living if you’re employed, or the standard you maintained at your last position if you are between jobs. Multiply the monthly figure by twelve to arrive at a yearly salary figure. This represents the bottom end of your salary range. Add around $10,000-$15,000 to that figure to find the top end of your range. This can be a good method of finding a realistic salary range that is reflective of your real financial needs. However, note that this method will not work if your current spending is much lower than your current salary—in that case your minimum figure may end up being much lower than what your position is worth.

For more info please review our Tools to Find a Job and Interview Tips.