How To Calculate Your Salary Requirements

How to calculate your salary requirements

This week's guest post comes from the amazing Kit Warchol from CareerContessa.com and she's sharing exactly how you can calculate your salary requirements to make sure you are getting paid what you are worth!


Determining your own salary requirements can feel like cruel and unusual punishment, especially if the position you're accepting never existed before.

This was certainly the case for my best friend who was recently offered a new, full-time position at the company where she was interning. They told her to come up with a number she thought was reasonable. Over dinner we talked about salaries and hours and past experience, circling the issue. Finally she flat out asked: "So how do I figure out a fair number?"

Her question stumped me, mainly because I realized I'd never read a simple answer despite the fact that, you know, I run a career site. Sure, your salary is completely subjective and depends on your industry, your experience, the company, etc. But are there really no guidelines whatsoever for this? 

Ultimately, I ran the question by one of our CC career experts (one of this job's major perks). Her response was so great, we published it for you here. But when I called my friend back to tell her what I'd found out, she said, "Oh, I already figured it out!" 

Tallying up three months worth will help you see patterns rather than, say, only looking at a particularly costly month.

One of the things I both love and hate about my best friend is that she's somehow always more proactive than I am. Turns out, she'd consulted with someone who just happens to work for a company that funds women-run start-up ventures in San Francisco. That seemingly never-ending and frustrating question of salary requirements? This woman owned it.

Here's the simplest equation to calculate your ask, adapted from that wise SF woman (with a bit of our own advice thrown in). 


Step 1: Add up your monthly expenses

All of them. Pull up your monthly statements for the past 90 days and actually total everything up. What's the average amount you spent each month on necessities including regular bills but also things like groceries, gas, toilet paper and toothpaste runs, etc? Tallying up three months worth of expenses will help you see patterns rather than, say, only looking at a particularly costly month when you went to three weddings and a birthday. 


Step 2: Double it

You're old enough now that you need to think at least a little bit about your savings. Maybe you need to buy a new car in the next year or you'd like to launch your own business in three years. On top of that, you'll want an emergency fund with some rent saved up (in case this job falls through. After all, you're a realist). You also need to feel comfortable setting money aside for the fun stuff like vacations, dinners out, drinks, etc. 

If you've already padded your ask with 20%, that offer will probably come within the zone you're shooting for. 


Step 3: Add 20%

"Because women always under-ask," my best friend explained. Harvard Business Review agrees, citing the fact that women are better at negotiating for others than they are for themselves. So the 20% does two things:

1. It forces you to ask for more than you're comfortable with, thereby taking into account the fact that that discomfort is probably illogical and bringing you down. 

2. It gives you a buffer zone for the counter-offer. Chances are the company will come back with a lower number, but if you've already padded your ask with 20%, that offer will probably come within the zone you're shooting for. 

So in other words:

{Average Monthly Expenses} x 2 + 20% {of Average Monthly Expenses} = {Your Ideal Salary} {click to tweet}

Not bad, huh? 

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What system do you use when determining salary?

{This was originally posted on CareerContessa.com}


Bola Onada Sokunbi

Bola is a Certified Financial Educator, money coach, finance writer, business strategist, social media influencer and founder of Clever Girl Finance, a platform that empowers and educates women to make the best financial decisions for their current and future selves and to pursue their dreams of financial independence in order to live life on their own terms.