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Methodology

Contract Renewal Value methodology

Compare current and renewal contract value over one user-entered work horizon.
Duc Nguyen X.By Duc Nguyen X.· Founder, Wage101Last reviewed: View update historyMethodology

Educational only: Work and pay decision support, not tax, legal, financial or career advice.

Privacy: Calculations run locally; Wage101 does not receive your work or pay inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral work and pay planning using your own assumptions.

1. Formulas and units

Renewal advantage
renewalAdvantage = renewalGross − currentGross − renewalCosts − gapCost

Where

renewalCosts
Renewal costs (currency units)Source: User assumption
renewalAdvantage
Renewal advantage (currency units/year)Source: Calculated output
Gap cost at current rate
gapCost = gapHours × currentRate

Where

currentRate
Current hourly rate (currency units/hour)Source: User assumption
gapHours
Gap hours (hours)Source: User assumption
gapCost
Gap cost at current rate (currency units)Source: Calculated output
Effective hourly-rate delta
effectiveHourlyRateDelta = renewalEffectiveHourlyRate − currentEffectiveHourlyRate

Where

effectiveHourlyRateDelta
Effective hourly-rate delta (currency units/hour)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Pay, time, benefits and work-related costs use the units stated beside each input.

2. Worked example

Input assumptions

100 versus 110 per hour for 20 hours over 48 weeks, with 2,000 cost and 40 gap hours.

Calculation and outputs

Example

100 versus 110 per hour for 20 hours over 48 weeks, with 2,000 cost and 40 gap hours.

Renewal advantage
3,600.00 currency units
Gap cost at current rate
4,000.00 currency units
Effective hourly-rate delta
3.75 currency units

The engine returns a 3,600 renewal advantage.

Interpretation

Use renewal advantage after keeping gap time and renewal costs visible.

3. Validation and boundary checks

  • The worked example is calculated through the same shared-work-logic engine as the planner.
  • Non-finite and out-of-range assumptions return an input error.
  • Result cards, trace, CSV, PDF and methodology bind to named engine result fields.

4. Assumptions and source classification

  • Both scenarios use the same billable work horizon.
  • Gap hours are valued at the current rate.

This calculator has no current policy-data dependency. Its work and pay assumptions are user supplied. Registered family-level regression suites exercise the shared work-logic engine and worked-result reconciliation.

5. Limitations

  • No enforceability, tax, probability or collection claim is made.
  • Non-billable time outside entered costs is excluded.

This is educational decision support, not personalised tax, legal, financial or career advice. Check the treatment of your circumstances under the rules that apply to you and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this calculator. Work and pay inputs remain user-supplied because they vary by person, job and contract.

Change history

  1. : Initial public release of the Contract Renewal Value planner and methodology.

Related reading

Use these practical guides to interpret the decision and its assumptions.

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