{"course":{"slug":"ai-careers","title":"Working in AI","url":"https://addaly.com/learn/ai-careers","level":"beginner","track":"work"},"lesson":{"slug":"comparing-two-offers","title":"Two offers, compared with arithmetic","url":"https://addaly.com/learn/ai-careers/comparing-two-offers","position":67,"of":85,"minutes":10,"answer":"Compare guaranteed cash first, then expected cash using historic payout rates, then contributions, avoided spending and the costs of the job, and enter equity in a private company at zero with the upside noted separately.","keyIdea":"Compare guaranteed cash first, then expected cash using historic payout rates, then contributions, avoided spending and the costs of the job, and enter equity in a private company at zero with the upside noted separately."},"body":{"format":"markdown","text":"## Do the sum on paper\n\nTwo offers feel like a choice between two vibes. They are mostly a choice between two spreadsheets, and the spreadsheet takes twenty minutes.\n\nHere is one worked all the way through. The currency is rupees and the method is currency-agnostic; substitute your own.\n\n## The two offers\n\n**A: product start-up, fully remote.** Quoted as ₹20,00,000 CTC:\nfixed cash ₹15,60,000; employer provident fund ₹86,400; gratuity accrual ₹75,000; insurance for self ₹18,000; variable at target ₹2,60,000. Six thousand share options at a strike of ₹180, current fair value ₹180.\n\n**B: global capability centre.** Quoted as ₹18,50,000 CTC:\nfixed cash ₹14,04,000; employer provident fund ₹86,400; gratuity accrual ₹67,500; family insurance ₹96,000; contractual bonus of 8% of fixed, ₹1,12,320. Three days a week in the office, an hour each way.\n\nA looks ₹1,50,000 better. Now do the work.\n\n## Step 1: guaranteed cash\n\nThe money that arrives whatever happens.\n\n```\nA: 15,60,000\nB: 14,04,000 + 1,12,320 (contractual)  = 15,16,320\n```\n\nNearly identical. The headline gap has already almost vanished, because A's extra was mostly a target.\n\n## Step 2: expected cash\n\nAsk what the variable actually paid. Suppose A's team has paid 50% of target for two years:\n\n```\nA: 15,60,000 + 1,30,000 = 16,90,000\nB: 15,16,320\n```\n\nA is ahead by about ₹1,74,000, and roughly ₹1,30,000 of that is contingent on a payout history you should verify rather than assume.\n\n## Step 3: employer contributions\n\n```\nA: 86,400 + 75,000 = 1,61,400\nB: 86,400 + 67,500 = 1,53,900\n```\n\nReal money, close to equal, and gratuity only vests after a qualifying period, five years in India, so treat it as long-term rather than annual.\n\n## Step 4: benefits you would otherwise buy\n\nA insures you. B insures your family. If comparable family cover would cost you ₹45,000 a year, B is **₹45,000 better** in avoided spending. For somebody with dependants or a parent to cover, this line is often larger than the salary difference and is the one people leave out.\n\n## Step 5: costs of the job itself\n\nB requires three days on site, an hour each way:\n\n```\ntransport: ~3,500/month  = 42,000/year\ntime: 6 hours/week x 45 weeks = 270 hours\n```\n\nMoney is easy to net off. The 270 hours are not money, and you should not convert them into money: write them down as hours and decide what they are worth to you, which depends entirely on your life.\n\n## Step 6: equity\n\nSix thousand options at a ₹180 strike when the fair value is ₹180 are worth **zero today**. They may be worth a great deal later. The honest entry in the comparison is: *expected value zero, with an unquantified upside I could not value because I do not have the share count or the preference stack.*\n\nNever let equity break a tie you would otherwise decide the other way. It is a bonus if it lands.\n\n## The result\n\n```\n              A            B\nguaranteed    15,60,000    15,16,320\nexpected      16,90,000    15,16,320\nemployer      1,61,400     1,53,900\nbenefits      —            +45,000\njob costs     —            -42,000, -270 hours\nequity        0 (upside)   0\n```\n\nA is ahead by roughly ₹1,20,000 of expected cash and 270 hours. B is ahead on certainty and family cover. That is a real decision rather than a difference in headline numbers, and you can now hold it in your head.\n\n## The column you cannot compute\n\nEverything above is the easy half. The half that decides how the next two years actually go:\n\n- **Who you would report to.** The largest single factor in whether a job is good, and impossible to quantify. Weight what you saw: did they listen in the interview, could they describe the team's failures, did they answer \"why is this role open\" without hedging?\n- **What you would learn**, and what job it makes possible afterwards. Early in a career this frequently outweighs a 10% pay difference. Later, with dependants, it frequently does not. Both are correct positions and only you know which one you are in.\n- **The company's stability.** A start-up's cash runway is a fair question and a good one will answer it.\n\n## The regret test\n\nWhen the arithmetic is close, ask which rejection you would rather explain to yourself in a year. Turning down more money for a manager you trusted is a decision people rarely regret. Turning down a job you wanted for eight per cent more is a decision people regret constantly.\n\n## The limitation\n\nYou are choosing under bad information, and no amount of care fixes that. The interview showed you three people for four hours; the reality is forty people for two years. Do the arithmetic because it removes the errors you can remove, then accept that the residual uncertainty is large and that this is what everybody else is doing too."},"check":{"question":"Two offers are within 2% of each other on expected cash. One insures the candidate's family, the other insures only the candidate; the second requires a commute costing 270 hours a year. What has the arithmetic actually established?","options":[{"text":"That the offers are equivalent and the decision should be made on which company is more prestigious.","correct":false,"tempting":"Discards the differences the arithmetic did surface and substitutes a signal that predicts very little about the next two years."},{"text":"That family cover and 270 hours are the real difference, and the remaining decision rests on the uncomputable column (manager, learning and stability) which should now be weighed deliberately rather than by feel.","correct":true},{"text":"That the candidate should ask both employers to improve their offers until one clearly wins on cash.","correct":false,"tempting":"Assumes the cash gap can be widened enough to decide it, when a few per cent will not outweigh benefits and hours either way."},{"text":"That the higher-cash offer wins, since benefits and commuting are personal preferences rather than compensation.","correct":false,"tempting":"Treats avoided insurance spending as a preference when it is a quantified cash difference of a similar size to the salary gap."}]},"prev":{"slug":"visas-and-relocation","title":"The shape of the routes, and why the rules keep moving","url":"https://addaly.com/learn/ai-careers/visas-and-relocation"},"next":{"slug":"how-pay-actually-moves","title":"Raises, promotions and the market rate","url":"https://addaly.com/learn/ai-careers/how-pay-actually-moves"},"authorship":"Founder and series editor: Dr Mustafa Mun. Written by AI models to a written standard. Exam keys checked blind by a second model: 3,665 of 3,666 agreed. Academic review invited.","review":{"status":"Draft, open for academic review"},"cite":"Addaly (2026) 'Two offers, compared with arithmetic', in Working in AI. Edited by M. Mun. Addaly. Available at: https://addaly.com/learn/ai-careers/comparing-two-offers (Accessed: 13 October 2026).","licence":{"name":"CC BY-NC-SA 4.0","url":"https://creativecommons.org/licenses/by-nc-sa/4.0/"},"reader":{"schema":1,"title":"Two offers, compared with arithmetic","courseTitle":"Working in AI","module":{"index":7,"slug":"the-money-and-the-paperwork","title":"The money, and the paperwork underneath it"},"answer":null,"keyIdea":"Compare guaranteed cash first, then expected cash using historic payout rates, then contributions, avoided spending and the costs of the job, and enter equity in a private company at zero with the upside noted separately.","hero":{"kind":"plate","image":null,"alt":null,"caption":null},"blocks":[{"t":"h2","id":"do-the-sum-on-paper","runs":[{"text":"Do the sum on paper"}]},{"t":"p","runs":[{"text":"Two offers feel like a choice between two vibes. They are mostly a choice between two spreadsheets, and the spreadsheet takes twenty minutes."}]},{"t":"p","runs":[{"text":"Here is one worked all the way through. The currency is rupees and the method is currency-agnostic; substitute your own."}]},{"t":"h2","id":"the-two-offers","runs":[{"text":"The two offers"}]},{"t":"p","runs":[{"text":"A: product start-up, fully remote.","b":true},{"text":" Quoted as ₹20,00,000 CTC: fixed cash ₹15,60,000; employer provident fund ₹86,400; gratuity accrual ₹75,000; insurance for self ₹18,000; variable at target ₹2,60,000. Six thousand share options at a strike of ₹180, current fair value ₹180."}]},{"t":"p","runs":[{"text":"B: global capability centre.","b":true},{"text":" Quoted as ₹18,50,000 CTC: fixed cash ₹14,04,000; employer provident fund ₹86,400; gratuity accrual ₹67,500; family insurance ₹96,000; contractual bonus of 8% of fixed, ₹1,12,320. Three days a week in the office, an hour each way."}]},{"t":"p","runs":[{"text":"A looks ₹1,50,000 better. Now do the work."}]},{"t":"h2","id":"step-1-guaranteed-cash","runs":[{"text":"Step 1: guaranteed cash"}]},{"t":"p","runs":[{"text":"The money that arrives whatever happens."}]},{"t":"code","lang":"","label":"Text","text":"A: 15,60,000\nB: 14,04,000 + 1,12,320 (contractual)  = 15,16,320"},{"t":"p","runs":[{"text":"Nearly identical. The headline gap has already almost vanished, because A’s extra was mostly a target."}]},{"t":"h2","id":"step-2-expected-cash","runs":[{"text":"Step 2: expected cash"}]},{"t":"p","runs":[{"text":"Ask what the variable actually paid. Suppose A’s team has paid 50% of target for two years:"}]},{"t":"code","lang":"","label":"Text","text":"A: 15,60,000 + 1,30,000 = 16,90,000\nB: 15,16,320"},{"t":"p","runs":[{"text":"A is ahead by about ₹1,74,000, and roughly ₹1,30,000 of that is contingent on a payout history you should verify rather than assume."}]},{"t":"h2","id":"step-3-employer-contributions","runs":[{"text":"Step 3: employer contributions"}]},{"t":"code","lang":"","label":"Text","text":"A: 86,400 + 75,000 = 1,61,400\nB: 86,400 + 67,500 = 1,53,900"},{"t":"p","runs":[{"text":"Real money, close to equal, and gratuity only vests after a qualifying period, five years in India, so treat it as long-term rather than annual."}]},{"t":"h2","id":"step-4-benefits-you-would-otherwise-buy","runs":[{"text":"Step 4: benefits you would otherwise buy"}]},{"t":"p","runs":[{"text":"A insures you. B insures your family. If comparable family cover would cost you ₹45,000 a year, B is "},{"text":"₹45,000 better","b":true},{"text":" in avoided spending. For somebody with dependants or a parent to cover, this line is often larger than the salary difference and is the one people leave out."}]},{"t":"h2","id":"step-5-costs-of-the-job-itself","runs":[{"text":"Step 5: costs of the job itself"}]},{"t":"p","runs":[{"text":"B requires three days on site, an hour each way:"}]},{"t":"code","lang":"","label":"Text","text":"transport: ~3,500/month  = 42,000/year\ntime: 6 hours/week x 45 weeks = 270 hours"},{"t":"p","runs":[{"text":"Money is easy to net off. The 270 hours are not money, and you should not convert them into money: write them down as hours and decide what they are worth to you, which depends entirely on your life."}]},{"t":"h2","id":"step-6-equity","runs":[{"text":"Step 6: equity"}]},{"t":"p","runs":[{"text":"Six thousand options at a ₹180 strike when the fair value is ₹180 are worth "},{"text":"zero today","b":true},{"text":". They may be worth a great deal later. The honest entry in the comparison is: "},{"text":"expected value zero, with an unquantified upside I could not value because I do not have the share count or the preference stack.","i":true}]},{"t":"p","runs":[{"text":"Never let equity break a tie you would otherwise decide the other way. It is a bonus if it lands."}]},{"t":"h2","id":"the-result","runs":[{"text":"The result"}]},{"t":"code","lang":"","label":"Text","text":"              A            B\nguaranteed    15,60,000    15,16,320\nexpected      16,90,000    15,16,320\nemployer      1,61,400     1,53,900\nbenefits      —            +45,000\njob costs     —            -42,000, -270 hours\nequity        0 (upside)   0"},{"t":"p","runs":[{"text":"A is ahead by roughly ₹1,20,000 of expected cash and 270 hours. B is ahead on certainty and family cover. That is a real decision rather than a difference in headline numbers, and you can now hold it in your head."}]},{"t":"h2","id":"the-column-you-cannot-compute","runs":[{"text":"The column you cannot compute"}]},{"t":"p","runs":[{"text":"Everything above is the easy half. The half that decides how the next two years actually go:"}]},{"t":"ul","items":[[{"text":"Who you would report to.","b":true},{"text":" The largest single factor in whether a job is good, and impossible to quantify. Weight what you saw: did they listen in the interview, could they describe the team’s failures, did they answer “why is this role open” without hedging?"}],[{"text":"What you would learn","b":true},{"text":", and what job it makes possible afterwards. Early in a career this frequently outweighs a 10% pay difference. Later, with dependants, it frequently does not. Both are correct positions and only you know which one you are in."}],[{"text":"The company’s stability.","b":true},{"text":" A start-up’s cash runway is a fair question and a good one will answer it."}]]},{"t":"h2","id":"the-regret-test","runs":[{"text":"The regret test"}]},{"t":"p","runs":[{"text":"When the arithmetic is close, ask which rejection you would rather explain to yourself in a year. Turning down more money for a manager you trusted is a decision people rarely regret. Turning down a job you wanted for eight per cent more is a decision people regret constantly."}]},{"t":"h2","id":"the-limitation","runs":[{"text":"The limitation"}],"role":"limit"},{"t":"p","runs":[{"text":"You are choosing under bad information, and no amount of care fixes that. The interview showed you three people for four hours; the reality is forty people for two years. Do the arithmetic because it removes the errors you can remove, then accept that the residual uncertainty is large and that this is what everybody else is doing too."}]}],"check":{"question":[{"text":"Two offers are within 2% of each other on expected cash. One insures the candidate’s family, the other insures only the candidate; the second requires a commute costing 270 hours a year. What has the arithmetic actually established?"}],"options":[{"text":[{"text":"That the offers are equivalent and the decision should be made on which company is more prestigious."}],"correct":false,"tempting":[{"text":"Discards the differences the arithmetic did surface and substitutes a signal that predicts very little about the next two years."}]},{"text":[{"text":"That family cover and 270 hours are the real difference, and the remaining decision rests on the uncomputable column (manager, learning and stability) which should now be weighed deliberately rather than by feel."}],"correct":true,"tempting":null},{"text":[{"text":"That the candidate should ask both employers to improve their offers until one clearly wins on cash."}],"correct":false,"tempting":[{"text":"Assumes the cash gap can be widened enough to decide it, when a few per cent will not outweigh benefits and hours either way."}]},{"text":[{"text":"That the higher-cash offer wins, since benefits and commuting are personal preferences rather than compensation."}],"correct":false,"tempting":[{"text":"Treats avoided insurance spending as a preference when it is a quantified cash difference of a similar size to the salary gap."}]}],"order":[3,0,1,2],"why":null},"prev":{"slug":"visas-and-relocation","title":"The shape of the routes, and why the rules keep moving","minutes":9},"next":{"slug":"how-pay-actually-moves","title":"Raises, promotions and the market rate","minutes":9}}}