Calculating your salary is easier than you think – use this equation

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?”

Follow Ladders on Flipboard!

Follow Ladders’ magazines on Flipboard covering Happiness, Productivity, Job Satisfaction, Neuroscience, and more!

Her question stumped me, mainly because I realized that 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 that 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!”
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 that 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).


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 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.


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.
Having trouble getting started? Use our super simple budgeting equation.


“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 percent cushion 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 that the company will come back with a lower number, but if you’ve already padded your ask with 20 percent, their 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} 

Not bad, huh?


You’ve done most of the work already. Doing salary research, and really knowing your worth is truly the most time-consuming part of this process. Now, you’re ready to confidently ask for what you know you deserve. The easiest way to do that is to set a meeting with your manager, and make the case using our 5-step negotiation process, which we call, “The GIMME.” Because asking for a raise is hard—and we want to help.

  • G: Give Background Info
  • I: Introduce Why You’re Awesome
  • M: Make Your Case Research-Based (This is where all that research comes in!)
  • M: Make the Ask
  • E: End with a Bang

By hitting each step as you talk, you’ll make a clear case for why you deserve more money, and you’ll provide your boss with a clear idea of how you’re helping your team, your company, reach the bottom line. It’s a perfect sell. (Pro tip: You can download our GIMME template for free right here.) And if you’re more of a visual learner—we’ve got a video for you on how you can research your salary.

This article first appeared on Career Contessa.

You might also enjoy…