How To Figure Out What Type Of Salary You're Actually Worth

by Noa Rodriguez-Hoffman

As a professional, this idea of knowing what you're worth and making sure you don't settle for less than what you're worth is a familiar concern most of us want to have resolved before negotiating a deal, new position or pay increase.

And yet, it can seem like an allusive number to figure out that many wind up going with a best guess instead of certainty.

Knowing how to really calculate what you're worth isn't as hard as you might think.

So, before you negotiate your worth, there are a few things you want to make sure you get right so you can enter a negotiation with confidence that you're not undervaluing yourself, but instead setting the course for your financial longevity.

To calculate how much you're really worth, here's what you need to do to get it right:

1. Research comparables.

This step really serves to establish a salary baseline for the type of position you currently have or are trying to secure.

Unsurprisingly, this research reveals a broad range for that position within your geographical area. or other industry-specific salary calculators are a great place to start, but they can't mirror your exact responsibilities, expertise, talents and situation.

This research is good for you to know because it's what the person on the other side of your negotiation also knows.

I recommend you leverage this intelligence to establish your bottom number, aka the minimum amount you are willing to accept. You will likely fall somewhere above or below the average salary this initial research reveals.

2. Bump up for experiences and education.

Now that you discovered the minimum amount you are worth based on comparable salaries of similar positions, it's time to give yourself bumps for your specific experiences and education.

Any and all experiences that make you more qualified for a particular role deserves a bump. Any and all experiences that make you better than a qualified candidate deserves even higher bumps.

You are the sum of all your experiences, so don't neglect experiences outside the scope of a position.

Also, if you have a higher degree that is preferred for the position, this should also translate to higher pay than someone without a higher degree.

You are the sum of all your experiences, so don't neglect experiences outside the scope of a position.

3. Place a premium on time and inconvenience.

If you are willing to put in more time outside what the position requires, or if this position is one that necessitates a high degree of travel, this means you're worth even more.

Because you're willing to flex to the needs of a company, especially if it requires occasional to frequent trips away from your family, you should be compensated extra for that.

The time you trade from your home for your employer is at a premium, so be sure you factor that into your worth!

It is at this point that many of us come up with a number that feels pretty good, but it still seems a little subjective. To get a more objective view of what you're really worth, follow these next steps closely.

4. Calculate how much your time is worth.

This is often an overlooked calculation that is so critically important to understanding what you're worth.

Before you enter a negotiation, take the number you came up with as a fair representation of what you are worth and then make a list of all the expenses you will incur in a year as a result of this employment.

Things like wardrobe, gas for commuting, mileage and car maintenance, childcare, meals, coffee and snacks, gifts and other miscellaneous supplies should all be on your radar.

Seriously consider all the costs you have or will have as a result of this position. Add back in company benefits, such as health insurance, paid time off, company contributions to retirement accounts, etc., and then, calculate your hours for the position for the entire year.

Your hours "on the job" exceed a straight 40-hour work week. Think of the extra time you will spend in the office. Know how many in-office hours you will actually spend.

You also have travel time to and from the office, business travel, business events and any other time you are spending to maintain life around your job. As best you can, estimate all the time you think you will spend to support your position in a year.

Divide your real wages by the actual number of hours you will spend on your job. This number is what truly tells you what you're valuing your time at. Only you know if that is a number you feel good about or not.

Taking these steps will help you calculate what you're really worth.

Knowing what you're really worth will help make you a stronger negotiator for the pay you deserve and add a lens of clarity that can only better prepare you for making smart financial decisions in the future.