Salary, Offers and Negotiation

Salary talk makes many good developers nervous. They fear that the company will take the offer back, or that they will look greedy. In practice, a polite and prepared request is normal. The Tech Interview Handbook's negotiation page says the same thing in strong words: in most cases there is room to negotiate, and the first offer is not the best the company can do. I will not repeat the pressure from that page. I will give you a calm, practical way to do it.

This is lesson 7 of 9. Before it: questions to ask them, where you decide your must-haves. After it: remote work, communication and managers. For the career side (levels, promotion, how pay grows over time) see Team Lead lesson 13, and for your resume and study plan see career lesson 0 and career lesson 1.

Words used in this lesson

• Base salary is the fixed yearly pay before tax and before extras.
• Bonus is extra yearly money, often a percent of base. Target bonus is what you get if goals are met, and the real payout can be higher or lower.
• Sign-on bonus is a one-time payment when you join. It often must be paid back if you leave early (a clawback).
• Equity means shares of the company, given to you as part of pay.
• RSU (restricted stock unit) is a promise of company shares that arrive on a schedule.
• Stock options are the right to buy shares at a fixed price (the strike price). They are worth something only if the share price is above the strike price. Their rules are more complex than RSUs.
• Vesting means the shares become yours step by step. Cliff is the first wait (for example, nothing for 12 months, then 25% at once).
• Total compensation (TC) is everything you get in a year, added up: base, bonus, equity, benefits, and so on.
• Benefits are things the employer pays for: health insurance, retirement match, leave, training budget, equipment.
• Counter-offer is your answer to an offer, with changes you ask for.
• BATNA (best alternative to a negotiated agreement) is what you will do if this deal does not happen: your other offer, or your current job.
• Anchor is the first number said in a negotiation. It pulls the rest of the talk toward it.
• Range is a low and a high number for a role. Companies often have one per level.
• Notice period is how long you must work after you resign, before you leave.

Before anything: know your three numbers

Write down three numbers before the first recruiter call:

1. Your walk-away number. The lowest total package you would accept. Below this you say no. It must cover your bills plus a margin you are happy with. Do not tell anyone this number.
2. Your target. What you would be happy with, based on research.
3. Your reach. A higher number you can explain with facts (skills, experience, market).

Also write your BATNA: "If I get nothing here, I stay in my job" or "I have another process at the final stage". A strong BATNA makes you calm. A weak one means you should start more interview processes in parallel, because having more than one is the best help in negotiation.

How to research a range (a worksheet)

Collect at least five data points from different places. Never use only one.

Then fill in this:

Role and level I am applying for: ______________City / remote region:              ______________Data points found (low - high):    1) ____  2) ____  3) ____  4) ____  5) ____Typical middle:                    ______________My walk-away:   ______    My target: ______    My reach: ______Reasons for my reach (3 facts):    1) ____________________________                                   2) ____________________________                                   3) ____________________________

The salary question: "What are your expectations?"

Almost every recruiter asks this in the first call. It can feel like a trap. There is a simple plan.

Step 1. Say you want to understand the role first. Step 2. Ask for their range. Step 3. If they insist, give a range, with your target near the bottom of it.

Why? The first number said often becomes the anchor. If you say a number lower than their budget, you lose money. If you say one far above, you may be dropped. When they give a range first, you know the budget.

Script 1: the recruiter asks for your expectation (spoken)

Script 2: the recruiter refuses to give a range

Notice: the range is wide enough, the lower end is a number you are happy with (not your walk-away), and the answer is about total compensation.

Script 3: "What do you earn now?"

In some places the law forbids employers from asking for your pay history. In others it is allowed. In every place you may politely decline.

If the recruiter pushes: "I understand it is a common question. I'd rather focus on the market range for this job. Is there flexibility in what you have budgeted?"

Script 4: you are junior and have no pay history

(Again, made-up numbers. Use your own research.)

When the offer arrives

An offer may come by phone first, then in writing. Your job at this moment is simple: stay calm, thank them, do not accept or refuse on the call, and ask for the details in writing and time to think.

Script 5: the offer call (spoken)

What to avoid on this call:

• Saying "yes" at once (you lose all room).
• Saying "that's too low" in an angry tone. You can say it later, in a calm email.
• Giving your number before you see the whole package.
• Filling a silence by dropping your price. Silence is fine.

Ask for these items in writing (the offer checklist):

[ ] Job title and level[ ] Base salary, currency, pay frequency[ ] Target bonus: percent, how it is decided, when it is paid, who must still be employed[ ] Equity: type (RSU or options), number of shares or dollar value, vesting schedule, cliff[ ] How the equity value is calculated (what share price they used) and any refresh grants[ ] Sign-on bonus and clawback terms (how long, how much)[ ] Relocation help, if any[ ] Retirement or pension contribution / match[ ] Health insurance: what the employer pays, what you pay, family cover[ ] Paid leave days, public holidays, parental leave, sick leave[ ] Remote / hybrid rules in writing[ ] Notice period and probation period[ ] Learning budget, equipment, conference budget[ ] Start date, and the date the offer expires[ ] Any non-compete, side-project or IP rules in the contract (read these!)

Total compensation: the arithmetic

Now the part that surprises many people. Higher base does not always mean higher pay. Let me compare two made-up offers for the same developer.

Offer A (a growing company): base 100,000, target bonus 10% of base, an RSU grant worth 60,000 vesting over 4 years at 25% per year (12-month cliff), sign-on bonus 8,000, retirement match 4% of base, employer pays 7,000 a year of health insurance.

Offer B (a stable company): base 115,000, target bonus 5% of base, no equity, no sign-on, retirement match 3% of base, employer pays 4,000 a year of health insurance.

All figures are in one imaginary currency, per year.

Step 1: compute each piece

Offer A:

• Base: 100,000
• Bonus: 10% of 100,000 = 10,000
• Equity per year: 60,000 / 4 = 15,000
• Retirement match: 4% of 100,000 = 4,000
• Health: 7,000
• Sign-on: 8,000 (once, year 1 only)

Steady yearly total (without sign-on): 100,000 + 10,000 + 15,000 + 4,000 + 7,000 = 136,000. Year 1 including sign-on: 136,000 + 8,000 = 144,000.

Offer B:

• Base: 115,000
• Bonus: 5% of 115,000 = 5,750
• Equity: 0
• Match: 3% of 115,000 = 3,450
• Health: 4,000

Steady yearly total: 115,000 + 5,750 + 0 + 3,450 + 4,000 = 128,200. Year 1 is the same, 128,200.

Step 2: compare "cash in hand" and "total"

Look at the two lines in bold. B pays about 10,750 more in cash each year (120,750 vs 110,000), but A is worth about 7,800 more in total (136,000 vs 128,200). The difference comes from equity, a bigger bonus, and benefits.

Step 3: ask "how sure is each piece?"

Not all money is equally sure. A base salary is almost certain. A bonus depends on results. Equity depends on the share price. Let me try a bad case for A: the bonus pays only 70% of target and the shares fall by 30%.

• Bonus: 70% of 10,000 = 7,000
• Equity: 15,000 x 0.7 = 10,500
• Steady total: 100,000 + 7,000 + 10,500 + 4,000 + 7,000 = 128,500

For B with the same bad bonus (70% of 5,750 = 4,025): 115,000 + 4,025 + 3,450 + 4,000 = 126,475.

So even in the bad case, A (128,500) is slightly above B (126,475), but the gap is small, and A has lower cash, which matters if you have a mortgage or a loan. In a good case (bonus 120%, shares up 30%) A reaches about 142,500 and B about 129,350. Remember: this is a made-up model with a simple "shares up or down" guess. Real share values can go to zero, especially in young companies, and private company shares may be hard to sell.

Notes on timing:

• The cliff. In Offer A, if you leave before month 12 you get none of the equity. The 15,000 in "year 1" is only real if you stay at least a year.
• The sign-on clawback. If A asks you to repay the 8,000 if you leave within 12 months, then it is not free money in year 1.
• Four-year view. Offers like A often add more shares later ("refresh grants"), but this is not guaranteed. Ask what the usual refresh looks like.

Step 4: the tax caveat

Everything above is before tax. Tax rules are different by country and change over the year. Some general points (check your own rules or ask an accountant):

• Salary and cash bonus are usually taxed as income.
• RSUs are often taxed as income when they vest, based on the share price on that day, even if you cannot sell yet. So you may owe tax on money you do not have in cash.
• Stock options can be taxed in different ways, and the rules are complex.
• Health benefits and retirement matches are often treated more kindly, but the details vary a lot.
• A sign-on bonus is usually taxed as income, and if you must repay it, the tax situation can get messy.

For a rough idea only, suppose (just for this exercise, not real) that a flat 30% tax applies to base, bonus, RSU and sign-on, and that match and health are untaxed.

• Offer A, steady year: taxable = 100,000 + 10,000 + 15,000 = 125,000. After 30%: 87,500. Add match 4,000 and health 7,000 as value: 98,500.
• Offer B, steady year: taxable = 115,000 + 5,750 = 120,750. After 30%: 84,525. Add 3,450 and 4,000: 91,975.

The order stays the same (A above B), but this is a toy model. Real tax can be progressive (higher rates on higher income), and equity timing can push a year into a higher band. The cash you can spend each month is the pay slip number, not the total compensation number, so compare both.

Step 5: the non-money side

After the numbers, ask about the things that don't show up in the table: manager, learning, hours, remote rules, stability, commute, the work itself. Use the team scorecard from lesson 5. Sometimes the lower-paying offer is right, because you will learn more or live better. The point is to make this choice with open eyes, not to chase the highest number.

What can be negotiated besides base pay

If the base is fixed (some companies have strict pay bands), you may still move other parts. In rough order of how often I see them move:

1. Sign-on bonus. Often the easiest, because it is one-time.
2. Equity amount. Often flexible in companies that give shares.
3. Level or title. A higher level moves the whole band. This matters a lot long-term.
4. Start date. Gives you time off between jobs or lets you collect a bonus from the old job.
5. Remote or hybrid days, and working hours.
6. Extra leave days.
7. Learning and equipment budget.
8. A review at six months (a promise to look at pay again). Get this in writing, and be aware it is a promise of a review, not a raise.
9. Relocation help.

The counter-offer: how to do it well

Rules I follow:

• Be warm. You want the job. Start by saying so.
• Be specific. Ask for a number or a package, not "more".
• Give a reason. Market data, your experience, another offer. One or two reasons only.
• Ask in writing (email) so you have a record and they can pass it to the approvers.
• Ask once, with the full package. Don't ask for base today and equity tomorrow.
• Do not threaten. Do not give ultimatums unless you really mean them.
• Never invent a competing offer. It can be checked and it breaks trust.

Script 6: counter-offer email (complete)

Use this using Offer A from the example. Suppose you want base 106,000, an RSU grant of 72,000, and a sign-on bonus of 15,000.

Subject: Offer for Backend Developer, next stepsHi Priya,Thank you again for the offer and for the time you and the team spentwith me. I'm very excited about the role. The checkout service and theplan to improve reliability are exactly the work I want to do, and Ican see myself contributing from the first month.After reviewing the details and comparing them with the market forthis level in our area, I'd like to ask if we can adjust the package:  - Base salary: 106,000 (the offer was 100,000)  - Equity grant: 72,000 over four years (the offer was 60,000)  - Sign-on bonus: 15,000 (the offer was 8,000)My reasons: I have six years of experience building and runningpayment-related APIs, and last year I led a project that cut ourincident count by 40 percent. The numbers above reflect the scopeof that experience and the range I found for this level.If we can agree on a package close to this, I'm ready to acceptand would be happy to sign this week. Is there flexibility onthese points? I'm happy to talk by phone if that is easier.Thank you,Jordan

(Priya and Jordan are made-up names.)

Let me check the arithmetic if the company agrees to everything in the counter. Base 106,000; bonus 10% = 10,600; equity 72,000/4 = 18,000; match 4% = 4,240; health 7,000. Steady total = 106,000 + 10,600 + 18,000 + 4,240 + 7,000 = 145,840. Year 1 with sign-on 15,000 = 160,840. Four-year average = (4 x 145,840 + 15,000) / 4 = 149,590. That is about 9,840 more per year than the first offer (145,840 vs 136,000). Not bad for one email, but also a reach. Many companies will meet you part-way.

Suppose the company comes back with: base 103,000, equity 66,000, sign-on 12,000. Then:

• Bonus: 10,300
• Equity per year: 16,500
• Match: 4% of 103,000 = 4,120
• Health: 7,000
• Steady total: 103,000 + 10,300 + 16,500 + 4,120 + 7,000 = 140,920
• Year 1: 140,920 + 12,000 = 152,920

That is 4,920 more per year than the first offer (140,920 vs 136,000), and 8,920 more in year 1. A partial win is a win.

Script 7: using a competing offer

Only if it is real.

Subject: Re: Offer detailsHi Priya,Thank you for sending the offer letter. I'm still very interested injoining your team, and your company is my first choice because of thework and the people I met.I want to be open with you: I have another offer with a total packageof around 128,000 with a higher base. I'd prefer your role, so I wantedto ask whether you can move closer to that level. Specifically, a baseof 108,000 would help me make the decision with confidence.I need to decide by next Friday. Please let me know what is possible.Best,Jordan

Notes: say the facts without a name or document. You are not required to share the other company's name or letter. You give a total, a clear request, and a date. Be careful about the date: do not claim a deadline that does not exist.

Script 8: asking for more time (deadline extension)

Offers often have a deadline of a few days. If you need time (for example, you are waiting for another company's answer), ask early and politely.

Subject: Request for a short extensionHi Priya,Thank you again for the offer. I'm taking it seriously and want togive you a well-considered answer.I'm in the final stage with one other company, and I expect to hearfrom them by next Wednesday. Would it be possible to extend mydecision date from this Friday to next Thursday? I can promise aclear answer by then, whichever way it goes.If this isn't possible, please let me know and I'll do my bestwith the current date.Thank you for your understanding,Jordan

And the quick version to the other company, to try to speed things up:

Subject: Timeline questionHi Sam,I wanted to let you know I've received an offer from another companywith a decision date of next Thursday. I'm very interested in yourteam and would like to continue the process. Is it possible to movethe final interview or the decision earlier, so that I can compareboth offers properly?Thank you,Jordan

This is honest, short and gives them a reason. Some companies can speed up. Some cannot. Either way you have asked politely.

Script 9: declining an offer (complete)

Decline quickly, kindly, and without detail that opens a debate. You may need these people again.

Subject: Decision on the Backend Developer offerHi Priya,Thank you very much for the offer and for the time you and the teamgave me. It was a hard decision, because I liked the team and thework on the checkout service.After careful thought I've decided to accept another offer thatfits my current priorities better. I'm declining the role.I really appreciated how open everyone was in the interviews, andI hope our paths cross again. Thank you again for your trust.Best wishes,Jordan

Tips: don't name the other company if you don't want to. Don't criticize anyone. If they ask for feedback you can say one honest, neutral sentence ("the other role has a bigger scope in data work"). If the reason was pay and you want to keep the door open, you can say that in one line: "The deciding factor was compensation." Some companies will come back with a better offer, but only say this if you would really change your mind.

Script 10: accepting an offer

Subject: Acceptance of the Backend Developer offerHi Priya,I'm very happy to accept the offer as described in your email of12 October: base 103,000, bonus target 10 percent, equity grant of66,000 over four years, sign-on bonus of 12,000, and a start dateof 3 November. I have attached the signed letter.Thank you for the work you did to put this together. Please tellme what you need from me before my start date (documents, equipmentdetails or anything else).Best regards,Jordan

Before you accept, check that all numbers match what you agreed. Then stop interviewing elsewhere and tell other companies politely that you have accepted another offer.

Resigning and the notice period

After you accept, you give notice to your current employer. Follow your contract. Be professional.

Script 11: resigning (short)

Subject: ResignationHi Alex,I'm writing to tell you that I've decided to resign from my role.My last working day will be 31 October, which is the end of my30-day notice period.Thank you for what I learned here, especially from working on thereporting service. I want to leave things in good shape and willwrite a handover document and train anyone who takes over my tasksbefore I go.Best regards,Jordan

If your employer makes a counter-offer to keep you, think carefully. Ask yourself why you wanted to leave in the first place. Money alone rarely fixes bad management, boring work, or no growth. That is advice from general experience, not research. Decide before the conversation what would make you stay.

Special cases

Equity at a young company. Ask: what percent of the company does this grant represent? What was the last valuation? Are there different share classes? What happens to unvested shares if the company is sold? What if you leave, how long do you have to exercise options? These are fair questions. If the company cannot answer them, treat the equity as lottery tickets: it may be worth a lot or nothing, so value it low in your math.

Contract or freelance rates. A contractor pays their own tax, leave, insurance and gaps between jobs. As a rough rule of thumb, people often need a day rate that is noticeably higher than the salary rate to match. I do not give a number, because it depends on your place.

Remote jobs and location-based pay. Some companies set pay by where you live, others by one global scale. Ask: "How is pay decided for remote employees, and does it change if I move?"

Moving countries. Visa, tax and social security rules are different. Ask a professional.

Very low offers. If the offer is far below your walk-away, say so kindly: "Thank you for the offer. This is quite a bit below the range I was expecting, so I would like to understand if there is room to bring it closer." If there is none, decline.

Try it

Exercise. You have two offers (made up):

• Offer X: base 90,000; target bonus 8%; equity: 40,000 over 4 years, 25% a year; sign-on 5,000; match 3%; health paid by employer 5,000.
• Offer Y: base 98,000; target bonus 5%; no equity; no sign-on; match 4%; health paid by employer 6,000.

1. Compute the steady yearly total and the year 1 total for each.
2. Which has more cash (base + bonus)?
3. Write what you would ask Offer X for, if you prefer X, in one sentence.
4. What is one risk of the X package that is not in the numbers?

Answer.

1. Offer X: bonus = 8% of 90,000 = 7,200. Equity per year = 40,000 / 4 = 10,000. Match = 3% of 90,000 = 2,700. Health 5,000. Steady total = 90,000 + 7,200 + 10,000 + 2,700 + 5,000 = 114,900. Year 1 = 114,900 + 5,000 = 119,900. Offer Y: bonus = 5% of 98,000 = 4,900. Match = 4% of 98,000 = 3,920. Health 6,000. Steady total = 98,000 + 4,900 + 0 + 3,920 + 6,000 = 112,820. Year 1 is the same: 112,820.
2. Cash: X = 90,000 + 7,200 = 97,200. Y = 98,000 + 4,900 = 102,900. Y has more cash (by 5,700), and X has more total (by 2,080 per year, more in year 1).
3. Example: "I prefer X, and would you consider a base of 94,000 or a larger equity grant, since the offer's cash is below the market range I found?" (Any specific, polite request with a reason is fine.)
4. Equity risk: the share price could fall, the cliff means no equity if you leave in the first year, and the sign-on bonus may have a repayment rule. The gap in total is small (2,080 per year), so the risk could easily make Y better in a bad case. If X's shares lose 50 percent, X's equity per year is 5,000, and the steady total drops to 109,900, below Y.

Interview questions

Key takeaways

• An offer is a package. Convert it to a yearly total, and look at cash and total separately.
• Higher base is not always higher pay. In my made-up example, base 100,000 beat base 115,000 in total (136,000 vs 128,200) while losing in cash (110,000 vs 120,750).
• Think about risk: bonus may change, shares may fall, a cliff means nothing before month 12, a sign-on bonus may need to be repaid.
• Everything is before tax. RSUs are often taxed at vesting. Ask a professional about your own rules.
• Let them give the range first. Never lie about your pay. Don't accept on the call.
• Counter once, in writing, warmly, with specific numbers and one or two reasons. A partial win is a win.
• Get promises in the offer letter. All numbers in this lesson are made up, so check current local data.

What's next

You can now read and negotiate an offer. In lesson 7 we move to the job itself: remote work, writing good updates, one-on-ones, managing up, and handling disagreement. For more on how companies decide levels and raises, see Team Lead lesson 13 on career growth.