Phillipe has two job offers as given below and really has no preference for either company. Compare the total compensations for the job offers and explain which job you think Phillipe should accept and why. Company A Gross pay $62,000 Medical insurance $3,400 Paid time off $8,000 Retirement $2,700 Job expenses $800 Company B Gross pay $60,000 25% of gross pay in employee benefits

Answer:

The total employment compensation for Company A is $75,300 and for Company B it is $75,000. If he chooses the job based on total employment compensation only, then he should choose Company A. Note that the $800 job expense is a reduction in the total compensation for Company A. Also, since there is only $300 difference in total compensation, he may want to choose based on other criteria, such as how many days vacation per year or how far it is to commute ot work.