Salary Negotiation Basics
Most people leave money on the table because they do not negotiate. They receive an offer, feel grateful, and accept. The company budgeted for negotiation — the initial offer is almost never the best they can do. Understanding the mechanics of salary negotiation is one of the highest-ROI skills a technologist can develop. A single successful negotiation can be worth tens or hundreds of thousands of dollars over the life of a role.
The Golden Rule: Never Give a Number First
The first person to name a number in a negotiation sets the anchor. If you say "I'm looking for 180,000, you just cost yourself 140,000, you gave them a target to negotiate you down from.
Recruiter: "What are your salary expectations?"
Bad response: "I'm looking for around $160,000."
- You just set a ceiling on your own offer
Bad response: "My current salary is $140,000."
- You just set a floor below what they might have offered
- In many states, it is illegal for them to ask this
Good response: "I'd prefer to learn more about the role and the
full compensation package before discussing numbers. I'm sure
we can find something that works for both of us."
Good response: "I'm focused on finding the right fit. What range
does this role pay?"
If they insist on a number, give a range based on market research with the bottom of your range at or above what you actually want.
Researching Market Rates
You cannot negotiate effectively without data. Before any compensation discussion, research what the market pays for your role, level, and location.
Primary Sources
levels.fyi
- Best source for tech compensation data
- Actual reported offers with base, bonus, and equity breakdown
- Searchable by company, level, location, and year
- Shows the range, not just the median
Glassdoor
- Broader coverage beyond tech
- Salary data is self-reported and sometimes outdated
- Useful for non-engineering roles and smaller companies
Blind
- Anonymous forum where tech employees share compensation
- Real-time data, often within weeks of an offer
- Skews toward FAANG and high-paying companies
- Take individual posts with a grain of salt
LinkedIn Salary
- Good for location-based adjustments
- Useful for understanding the range at a specific company
Payscale and Salary.com
- Better for non-tech or traditional companies
- Useful for understanding regional differences
How to Use Compensation Data
Do not look at the median and call it a day. Understand the distribution.
Example: Senior Software Engineer at Company X in San Francisco
levels.fyi data:
25th percentile total comp: $280,000
Median total comp: $320,000
75th percentile total comp: $370,000
90th percentile total comp: $420,000
What this tells you:
- The "standard" offer is around $320K
- If you negotiate well or have competing offers, $370K is realistic
- $420K is possible but requires strong leverage
- Below $280K means they are low-balling you
Understanding Total Compensation
Salary is one component. Total compensation includes several pieces, and companies structure them differently to make offers look competitive while managing their actual cost.
Components of Total Compensation
Base Salary
- Guaranteed annual cash payment
- Typically paid biweekly or monthly
- This is what your mortgage lender cares about
- Usually the least negotiable component (bands are tight)
Annual Bonus
- Typically 10-20% of base for individual contributors
- Often "target" bonus, meaning you get 100% if you meet expectations
- Actual payout depends on individual and company performance
- Some companies guarantee first-year bonus
Equity (RSU or Options)
- Often the largest component at tech companies
- RSUs: you receive actual shares on a vesting schedule
- Options: you receive the right to buy shares at a set price
- Typically vests over 4 years
- Value depends heavily on stock price
Sign-on Bonus
- One-time cash payment, usually in first paycheck or first month
- Used to offset equity vesting cliffs or competing offers
- Often has a clawback clause if you leave within 1-2 years
Benefits
- Health insurance (can be worth $10-25K annually)
- 401(k) match (often 50% up to 6%, worth $5-10K)
- Paid time off
- Parental leave
- Learning and development budgets
- These are rarely negotiable but vary significantly between companies
Comparing Offers Apples-to-Apples
When comparing offers, convert everything to annualized total compensation.
Offer A: Big Tech Company
Base: $185,000
Bonus: 15% target = $27,750
RSU: $300,000 over 4 years = $75,000/year (at current price)
Sign-on: $50,000 (spread over first year)
Year 1 total: $337,750
Steady-state annual: $287,750
Offer B: Growth-Stage Startup
Base: $170,000
Bonus: None
Options: 50,000 shares at $2 strike, "worth" $500,000
Sign-on: $25,000
Year 1 total: $195,000 + option value (uncertain)
Steady-state annual: $170,000 + option value (uncertain)
Offer B might be worth more if the startup succeeds, but the guaranteed cash is much lower. Your financial situation determines which is actually better for you.
The Negotiation Window
The window for negotiation opens when you receive a written offer and closes when you accept or decline. This window is typically 3-7 business days. Everything before the offer is positioning. Everything after acceptance is too late.
Timeline:
1. Verbal offer ("We'd like to extend an offer")
- Express enthusiasm but do not accept verbally
- "That's exciting. I'd love to see the full details in writing."
2. Written offer received
- This is when the clock starts
- Read every detail: base, bonus, equity, vesting, start date
- You typically have 3-7 business days
3. Negotiation (1-3 rounds typical)
- First ask: your primary request (usually equity or base)
- Company responds with a revised offer or holds firm
- Second ask: secondary items (sign-on, start date, title)
4. Final offer
- The company says "this is our best and final"
- You accept, decline, or ask for a small accommodation
5. Acceptance
- Sign the offer letter
- Negotiation is over
Timing Matters
The moment you have a written offer, you have maximum leverage. The company has decided they want you. They have invested time and money in the hiring process. They do not want to restart. This is when you negotiate.
Do not negotiate:
- During the first recruiter screen (too early, no leverage)
- Before you have a written offer (nothing to anchor against)
- After you have already accepted (too late, bad faith)
Do negotiate:
- After receiving the written offer
- When you have competing offers or a deadline
- Before you sign anything
How to Make the Ask
Be direct, professional, and specific. Vague requests get vague responses.
Weak ask:
"Is there any flexibility in the offer?"
- This is easy to dismiss with "the offer is competitive"
Strong ask:
"Thank you for the offer. I'm very excited about the role.
Based on my research and competing offers, I was hoping we
could discuss the equity component. Would it be possible to
increase the RSU grant from $200K to $280K over four years?
I believe that better reflects my experience level and the
market rate for this role."
- Specific number
- Justified with research and competing data
- Focused on one component
- Professional and enthusiastic tone
What to Negotiate
Not all components are equally negotiable. Focus your energy where the company has the most flexibility.
Most negotiable:
- Sign-on bonus (one-time cost, easy for the company to approve)
- Equity/RSU grant (especially at larger companies with stock plans)
- Start date
Moderately negotiable:
- Base salary (bands exist but there is usually some room)
- Annual bonus target (sometimes adjustable by 5-10%)
- Title/level (impacts long-term earnings trajectory)
Least negotiable:
- Benefits (company-wide, not individual)
- PTO policy (usually standardized)
- Vesting schedule (company-wide policy)
Negotiation Over Email vs. Phone
Email gives you time to craft your words and creates a paper trail. Phone lets the recruiter read your tone and have a real-time conversation. Both have their place.
Use email when:
- Making your initial counter-offer
- You need time to think about your phrasing
- You want a written record of what was said
Use phone when:
- The recruiter calls you to discuss the offer
- You want to build rapport and show enthusiasm
- You need to discuss multiple components interactively
- The negotiation is stuck and needs a human touch
After a phone call:
- Always follow up with email summarizing what was discussed
- "Thanks for the call. To confirm, you'll look into increasing
the RSU grant and get back to me by Thursday."
Common Pitfalls
- Accepting the first offer out of gratitude — the company expects negotiation; not asking leaves money on the table
- Giving your current salary — in many jurisdictions this is illegal to ask; even where legal, it anchors you below market
- Negotiating only base salary — equity and sign-on are often more flexible and can be worth more
- Being adversarial — negotiation is collaborative; you are trying to find a number that works for both sides
- Making threats you will not follow through on — "I'll walk away" only works if you actually will
- Negotiating without data — "I want more" is not a negotiation strategy; "levels.fyi shows the 75th percentile at $X" is
- Accepting a verbal offer as final — always get it in writing; verbal offers are not binding
- Forgetting about the long tail — a $10K higher base compounds with raises, bonus percentages, and future negotiations
Key Takeaways
- Never give a number first — let the company make the initial offer
- Research market rates using levels.fyi, Glassdoor, and Blind before any compensation discussion
- Think in total compensation: base, bonus, equity, sign-on, and benefits all matter
- The negotiation window is narrow — use it between receiving the written offer and accepting
- Be specific in your asks, justify them with data, and focus on the most negotiable components
- Most people do not negotiate at all, which means even a modest effort puts you ahead
- A single negotiation can compound into hundreds of thousands of dollars over a career