Evaluating a Job Offer Beyond the Hourly Rate
Why this matters
Techs change shops for a dollar or two more an hour, then find out the new place has no take-home truck, a health plan that costs three times as much, overtime that dried up in October, and an on-call rotation every third week. The hourly rate is one line of a dozen, and it is often not the biggest. A higher-rate offer can be worth less than the one you turned down, and the only way to know is to put every line in the same unit and add them up before you give notice. This is the procedure, with a filled-in comparison of two real-shaped offers at the end.
This is general information, not personal financial advice.
The unit: hours of pay at one offer's rate
Comparing hourly rate against health premiums against commute miles is apples against wrenches. Pick one offer's base hourly rate and call an hour of it one A-hour. Every line of both offers then gets converted into A-hours per year. A higher rate is just a multiplier: an offer paying 1.12 times A's rate pays 1.12 A-hours for every hour worked. No currency needed, and it works at any wage.
The steps
1. Get every offer in writing, with the pay plan spelled out. Ask for the base rate or flat-rate table, how overtime is calculated, any guarantee or minimum, the benefits summary with your premium share by coverage tier, the PTO policy, the on-call policy and whether there is a take-home vehicle. Why: verbal promises ("we'll get you on a truck in a month," "overtime all summer") are where offers fall apart, and you cannot compare what you cannot see. What breaks if you skip it: you resign based on a number that turns out to have conditions attached.
2. Annualize the base on paid hours. Base pay is the rate times 2,080 paid hours a year for a full-time hourly job, with paid PTO and holidays included in those hours. For a flat-rate or commission offer, ask for the median annual pay of techs at your level for the last full year, not the top earner's figure, and convert it to A-hours. See related: How Flat-Rate Pay Works From the Tech's Side. Why: a rate is not income until hours are attached. What breaks: a flat-rate offer described by its best tech's year looks like a raise and is not.
3. Price overtime from the shop's history, then price a slow year. Ask: "How many overtime hours did a tech in this role average last year?" Multiply by 1.5 times the offer's rate, the federal floor for hourly non-exempt work under the Department of Labor's FLSA overtime rules. Then run the same comparison with overtime cut to a slow year. Why: for many residential techs, overtime is the difference between a good year and an average one, and it varies more between shops than base rates do. What breaks: you compare a busy shop's best case against a steady shop's normal and choose wrong. See related: Overtime Rights a Tech Should Know.
4. Price the take-home truck. If one shop provides a truck you drive home and the other expects you to commute in your own vehicle, the truck is worth your avoided commuting cost: daily round-trip miles times working days times what a mile costs you in fuel, maintenance, insurance and depreciation. Why: this line is routinely worth more than a rate difference, and it never appears on an offer letter. What breaks: you take a higher rate and spend it on your own truck's fuel and wear. Note that a take-home truck can create taxable imputed income for personal use, including commuting, unless the vehicle qualifies for an IRS exception; see related: The Take-Home Truck and Its Tax Treatment.
5. Price the phone, the tools and the uniforms. A company phone versus a stipend versus your own phone; a tool allowance, shop-supplied specialty tools, or "bring your own." Ask who owns tools bought with an allowance if you leave. Why: a tech who must supply a full set of specialty tools, meters and gauges carries a cost the other shop absorbs. What breaks: the first month at the new shop goes to the tool truck. See related: Tool Allowances, Reimbursements and Taxes.
6. Price the benefits you will actually use, at your share. For health insurance, compare your premium per year for your tier (employee only, plus spouse, family), not the employer's contribution. Then the deductible and out-of-pocket maximum for anyone with known care needs. See related: Health Insurance Choices for a Tradesperson. For retirement, the match formula and the vesting schedule: a match that vests over three years is partly forfeited if you leave in year one. See related: The Retirement Match and Why to Take It. Note whether disability coverage is offered and on what pay. Why: health premium shares can differ by weeks of pay between shops. What breaks: a family-coverage premium wipes out a rate increase.
7. Write down the time terms, unpriced. PTO days, paid holidays, on-call frequency and whether on-call pays a stipend or only call-outs, typical start time, weekend expectations, and whether drive time to the first call is paid. Do not force these into A-hours; list them under the total. Why: time is where people who took the "better" offer are unhappy six months later, and a single total hides it. What breaks: you gain 9 A-hours a year and lose four on-call weekends.
8. Read the strings: non-competes, repayment clauses, probation. Look for a non-compete or non-solicit, and for training or tool repayment agreements that make you pay back costs if you leave within a set period. Enforceability is state law and varies: California voids most non-competes, and California passed legislation in 2025 restricting stay-or-pay repayment clauses, while other states enforce reasonable versions. Also note any probation period before benefits start. This is not legal advice: if an agreement restricts where you can work after leaving or requires repayment, have an employment attorney in your state read it before you sign, and bring the agreement and the offer letter. Why: these clauses decide what your next move costs. What breaks: a raise that comes with a two-year leash.
9. Add it up, run the slow-year case, and decide what to negotiate. Total both offers, recompute with the riskiest line (usually overtime) at its downside, and see whether the winner changes. Then use the gap: the losing shop may be able to close a specific line (a truck, a premium share, a tool allowance) more easily than it can raise the rate.
The worked example: two offers, every line priced
A residential plumbing tech has two offers.
Offer A: base rate (1.00 A-hour per hour). Last year's techs averaged 250 overtime hours. Take-home van with fuel card. Company phone. Tool allowance worth 40 A-hours a year. Health premium share for employee-only coverage: 60 A-hours a year. 401(k) match of 4 percent of wages. 10 PTO days. On call one week in four, with call-out pay.
Offer B: 12 percent higher rate (1.12 A-hours per hour). Techs averaged 80 overtime hours last year. No take-home vehicle; mileage paid for job driving only, commute in his own truck. Phone stipend worth 10 A-hours. No tool allowance. Health premium share: 180 A-hours a year. 2 percent match. 15 PTO days. On call one week in three, no stipend.
Converting each line:
- Base: A is 2,080 times 1.00, which is 2,080. B is 2,080 times 1.12, which is 2,329.6.
- Overtime: A is 250 hours times 1.5, which is 375.0. B is 80 hours times 1.5 times 1.12, which is 134.4.
- Commute: his round trip is 40 miles, 240 working days, 9,600 miles a year. He figures his own truck costs about 0.015 A-hours per mile all-in (an illustrative figure; work out yours from fuel, maintenance and depreciation). 9,600 times 0.015 is 144.0 A-hours avoided with A's van.
- Match: A is 4 percent of 2,455 wages (2,080 plus 375), which is 98.2. B is 2 percent of 2,464 (2,329.6 plus 134.4), which is 49.3.
LINE, A-HOURS PER YEAR OFFER A OFFER B
Base, 2,080 paid hours 2,080.0 2,329.6
Overtime, last year's average 375.0 134.4
Commute avoided (take-home) 144.0 0.0
Phone 20.0 10.0
Tool allowance 40.0 0.0
Health premium, your share -60.0 -180.0
401(k) match 98.2 49.3
-------------------------------------------------
TOTAL 2,697.2 2,343.3
NOT IN THE TOTAL
PTO days 10 15
On-call weeks per year 13 17
On-call pay call-outs none
Reading it. B's 12 percent rate is worth 249.6 A-hours on base (2,329.6 minus 2,080). Overtime takes almost all of that back: B's total wages are 2,464 against A's 2,455, only 9 A-hours apart. Then the van (144.0), the health premium difference (120.0), the tool allowance (40.0), the match difference (48.9) and the phone difference (10.0) all go to A. A's total is 2,697.2 against B's 2,343.3, a gap of 353.9 A-hours, about 15 percent of B's total. The higher rate is the lower offer.
The slow-year case. Overtime is A's riskiest line. If A's overtime falls to B's level, 80 hours, A's overtime line becomes 120.0 instead of 375.0, and the match falls by 4 percent of the 255 lost, or 10.2. A's total: 2,697.2 minus 255 minus 10.2 equals 2,432.0, still 88.7 A-hours ahead of B's 2,343.3. A wins in its own slow year.
What would flip it. If B matched A's health premium share (60 instead of 180), B's total rises by 120 to 2,463.3. That still loses to A's normal year by 233.9 but beats A's slow year by 31.3. So a single negotiable line, the premium share, turns this from a clear choice into a judgment about how busy A will really be.
The time lines. B gives 5 more PTO days, 40 hours off a year, but asks for 4 more on-call weeks with no stipend. For a tech with young kids, those four weekends may matter more than the 40 hours.
What he did. He went back to B and asked for a take-home van. B could not offer one. He took A, and asked A for one thing the comparison showed was cheap for them to give: a fifth paid holiday.
How to check your own comparison
Before you decide, confirm three things on your sheet. Every line in the total is in the same unit, A-hours per year, with no rate and no percentage left unconverted. Overtime came from the shop's actual average, and you ran the slow-year case and wrote down whether the winner changed. Your health premium is your share at your tier, not the employer's contribution and not the employee-only figure if you will cover family. If any of the three fails, the total is not ready to act on.
References
- U.S. Department of Labor, Fair Labor Standards Act overtime requirements
- IRS Publication 15-B, Employer's Tax Guide to Fringe Benefits (employer-provided vehicles)
- Your state labor department, for non-compete and repayment-agreement rules
- See related: The Take-Home Truck and Its Tax Treatment, Health Insurance Choices for a Tradesperson, The Retirement Match and Why to Take It, How Flat-Rate Pay Works From the Tech's Side