Methodology
Golden Handcuffs methodology
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
netLeavingAdvantage = annualCompIncrease × horizonMonths ÷ 12 − riskAdjustedForfeiture − switchingCostsWhere
- annualCompIncrease
- Annual compensation increase (currency units/year)Source: User assumption
- horizonMonths
- Comparison horizon (months)Source: User assumption
- switchingCosts
- Switching costs (currency units)Source: User assumption
- netLeavingAdvantage
- Net leaving advantage (currency units)Source: Calculated output
riskAdjustedForfeiture = unvestedFaceValue × vestProbability × realizabilityWhere
- unvestedFaceValue
- Unvested face value (currency units)Source: User assumption
- vestProbability
- Vest probability (probability)Source: User assumption
- realizability
- Realizability factor (share)Source: User assumption
- riskAdjustedForfeiture
- Risk-adjusted forfeiture (currency units)Source: Calculated output
breakEvenMonths = (riskAdjustedForfeiture + switchingCosts) ÷ annualCompIncrease × 12Where
- annualCompIncrease
- Annual compensation increase (currency units/year)Source: User assumption
- switchingCosts
- Switching costs (currency units)Source: User assumption
- breakEvenMonths
- Break-even months (months)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
60,000 face value at 75% probability and a 15,000 annual compensation increase.
Calculation and outputs
Example
60,000 face value at 75% probability and a 15,000 annual compensation increase.
- Net leaving advantage
- 0.00 currency units
- Risk-adjusted forfeiture
- 45,000.00 currency units
- Break-even months
- 36
The engine returns 45,000 risk-adjusted forfeiture and a 36-month break-even before switching costs.
Interpretation
Use net leaving advantage as a scenario based on your probability and realizability assumptions.
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
- Vest probability and realizability are explicit user assumptions.
- Annual compensation increase remains constant over the horizon.
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 security-price forecast, tax or vesting guarantee is made.
- Non-financial career considerations are 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
- : Initial public release of the Golden Handcuffs planner and methodology.
Related reading
Use these practical guides to interpret the decision and its assumptions.
- How to use the Golden Handcuffs calculator
Compare a user-adjusted forfeiture estimate with compensation gains and switching costs over a chosen horizon.
Read guide