When to turn down a raise (yes, sometimes)
I've turned down two raises and coached three friends through saying no to theirs. Each time the number looked good on paper. Each time saying no was the right call. The math for "no" isn't obvious, which is why most people default to yes and regret it 18 months later.
Here are the three scenarios, with real numbers.
Scenario 1: the geographic move that costs more than it pays
2023. I had a $140k remote salary in Austin, TX. A Bay Area company offered me a role with a 10% base bump ($154k) plus relocation to SF. On paper, a meaningful raise. In reality:
- Base bump: +$14,000/year
- California state tax delta on $154k single: -$10,100/year (vs TX zero)
- Rent differential: my Austin 2br was $2,400/month; comparable SF was $4,200/month. -$21,600/year
- Groceries, utilities, gas: -$3,000/year estimated (20% COL increase)
- Commute: I'd go from home office to a 35-min BART ride. Hard to price, call it -$1,500/year in transit + time
Net: -$22,200/year on a 10% "raise."
I took the Austin counter-offer instead, 6% base bump ($148,400) with remote kept intact. Net positive of $8,400 vs the old salary, and $30,600 better than the "10% raise" to SF.
That spreadsheet is still on my laptop. It cost me maybe 40 minutes to build and it was the highest-value 40 minutes I've spent on personal finance, ever.
Use the pay raise calculator to compare the tax side of the move, then overlay your own rent and COL assumptions. The state tax number alone is often decisive.
Scenario 2: the promotion that kills your equity
A friend, startup engineer, got promoted from Senior to Staff in 2022. Base moved from $170k to $195k, a 14.7% bump. Sounds great. But:
- Her original IC grant had 2.5 years of vesting remaining. Value at vest: ~$240k over 30 months.
- The promotion came with a "refresh grant" of $120k over 4 years, which diluted her per-month equity by ~$3,000/month.
- Expected 4-year value of the refresh: $120k face, probably 50-70% in reality given pre-IPO.
- Lost expected value over next 30 months vs keeping old grant: about $90,000.
Net: base +$25k/year ($75k over 30 months), equity -$90k. Promotion cost her $15k expected value on a 30-month horizon, plus the new role's scope change and time demand.
She negotiated. The refresh grew from $120k to $180k when she pushed back, which flipped the math positive. Lesson: always model the full comp change, not just base. See is a promotion always worth it for the broader framework.
Scenario 3: the scope expansion without authority
This one's the most common and the hardest to see at the time.
A former direct report at a previous company was offered a 7% bump to "take on the team's roadmap planning alongside her IC work." No new title, no direct reports, just scope. We did the math:
- Base bump: $130k to $139k, +$9k gross
- Net take-home delta (single, TX): +$6,750/year
- Expected time delta: 8-12 additional hours/week for planning meetings, stakeholder sync, cross-team coordination
- Effective hourly rate change: her old job at 45 hrs/week = $55/hour. New job at 54 hrs/week = $49/hour.
She was being offered a raise that was, in hourly terms, a pay cut. Her effective rate dropped. And without a title change, she wouldn't get credit for the work externally; next year's promo candidate was likely to be someone else.
She said no. Asked for a Staff title plus the scope, or just the base bump without the scope. Got the base bump without the scope. A year later got promoted on her actual work.
Scope without authority or title is work you do for free. A raise alone does not pay for it over a career.
When to say no, checklist
Before accepting a raise, run this list.
- Does it come with a geographic move? Run state tax + cost of living. A nominal raise can be a real cut.
- Does it come with a scope expansion? Calculate hourly rate, not just gross.
- Does it affect your equity? Refresh grants can dilute existing vesting. Model total comp over 4 years.
- Does it come with a title change? If no title, your market value doesn't move; you're not building resume leverage.
- Does the scope come with authority? Responsibility without authority is a trap.
- Will it affect benefits or thresholds (student loan IDR, ACA, Medicaid)? Some are real cliffs.
- Does it match or beat CPI? See 3% raise vs inflation.
If two or more of these red-flag, pause before accepting. Negotiate for what's missing (title, authority, bigger base, retention bonus). If the answer is no, the raise may not be worth taking.
How to actually say no
"No" is almost never the right word, even when it's the right answer. Better framing:
"Thank you so much for the offer. I've thought about this carefully and I don't think the structure works for me in its current form. Could we explore [title change / larger base / different scope / retention package]? If not, I'd rather stay where I am and revisit next cycle."
This keeps the relationship. Most employers respect a thoughtful no more than they respect a reluctant yes. And sometimes the pushback results in a better offer; the company had flexibility they didn't lead with.
The opportunity-cost frame
Every time you say yes to a raise, you're also saying no to the energy of pursuing something bigger. A raise that keeps you at a company for another 18 months is an 18-month opportunity cost on your external market value. If your market value is growing faster than your internal comp (which is the norm in hot skills), accepting a raise can cost you more than rejecting it.
I've watched this play out in tech specifically. Staying at a company because of a 6% raise when external offers would be 18% above your current base is a losing trade, even before you factor in promotion trajectory.
What the calculator won't tell you
The calculator models the tax side cleanly. It does not model:
- Cost of living differences between cities
- Equity grant value or dilution
- Scope changes and hours-per-week shifts
- Title-based market value trajectories
- Benefits (health, 401(k) match, PTO) delta between offers
For those, build a spreadsheet. Include rent, state tax, benefits value, equity, and projected 4-year comp. I keep mine under 20 lines. It's enough.
Takeaways
- Raises can cost money when they come with moves to high-tax, high-COL regions.
- Equity dilution can offset base bumps. Model 4-year total comp.
- Scope without title or authority is a hidden pay cut.
- Saying no professionally often results in a better counter-offer.
- Opportunity cost of accepting matters, especially in hot skill markets.
Related reading: state income tax impact, is a promotion always worth it, and the 3-email negotiation playbook. Run your scenario in the calculator before deciding.