Changing jobs can be an exciting prospect. You may be thrilled at the idea of earning more money, enjoying more benefits, or simply having a change of pace, environment, and obligations. However, any new career can require a great deal of thought and planning. There’s more to consider than a different commute path. You should also consider these 5 potential financial issues before changing jobs.
Tax Changes and Implications
There can be many behind-the-scenes tax implications to consider when you change jobs. That’s why, before filling out your online tax return form for the end of the financial year, you should talk to your preferred accounting professional about what to expect from your new job.
For example, relocating to a new state for work may mean you pay a different income tax rate, which can affect your take-home pay. If your new job comes with stock options and bonuses, you may be required to pay tax on these. High tax rates may reduce their value.
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The Benefits and Perks
Benefits and perks with new businesses can look desirable, but that doesn’t mean they’re comparable to what you’re receiving now. Don’t be afraid to learn more about all available benefits and perks before accepting a job.
For example, consider evaluating the health insurance plan you’re provided. Compare the premiums, deductibles, and out-of-pocket costs to what you’re currently receiving.
The same goes for retirement contributions. Is your new employer going to contribute more or less to your retirement plan, such as 401(k)? You may also like to review how much sick leave, parental leave, and PTO you’re entitled to.
Your Expected Salary and Compensation
Money isn’t everything when you’re considering changing jobs. In fact, a study by FlexJobs found that employees would take a pay cut, increase their working hours, or give up vacation days if it meant they could work from anywhere.
However, that doesn’t mean you shouldn’t consider your expected salary and compensation before taking a new job. How much you can earn with a new employer may affect your decision to take a new job or stay with your current employer.
Look at your base salary, bonuses, incentives, and equity or stock options. Consider whether all these financial components align with your goals and needs.
The Cost of Living
If taking a new job would mean having to relocate, you may need to research whether a change in the cost of living would positively or negatively affect your financial situation. Sometimes, a pay increase isn’t enough to offset higher living costs.
Aside from the initial relocation costs, look at housing, transportation, and general living expenses. If moving would also mean selling your home and buying a new one, research the property market to see if it would make financial sense.
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Job Security
If something sounds too good to be true, then it probably is. Keep this adage in the back of your mind before accepting a job with a new company. Don’t be afraid to research the new company’s financial health and the industry it’s in. A high salary may not be as desirable as it seems if you’re continually at risk of being laid off in the event of the business’s closure.
There can be many financial issues to consider before changing jobs. If you’ve received a job offer or are applying for new jobs, factor the information above into the decision-making process. A higher salary isn’t always the be-all and end-all of employment opportunities.
