Employment Contract Review Calculator
Key terms analysis and risk assessment scoring.
About this calculator
This calculator scores an employment contract on five clauses that matter most in practice — severance, non-compete, arbitration, IP assignment, and total compensation — and turns each into a dollar figure or a 0-100 protection score you can compare across offers. It starts from a 50-point baseline and adds or subtracts points: a severance clause is worth +20, no non-compete is +10, keeping court access (no forced arbitration) is +10, and a narrow IP assignment (one that doesn't claim your personal side projects) is +10. Restrictive terms pull the score down — a non-compete over 12 months costs -10, mandatory arbitration costs -5, and broad IP assignment costs -5. Alongside the score, it estimates the severance you'd actually collect (weekly pay times severance weeks times vesting years, only if the clause exists), and the non-compete's opportunity cost — modeled as a flat 30% income reduction for however many months you'd be restricted, which is a simplification since real income loss during a restricted job search varies enormously by industry and location.
It also produces a risk-adjusted compensation figure: total comp discounted by up to 15% based on how unfavorable the contract's terms are, meant to show that two offers with identical salaries aren't equally valuable once you account for what each contract lets the employer do to you later. The biggest thing to know going in: this is a heuristic scoring model, not a legal opinion. Non-compete enforceability, arbitration clause validity, and IP assignment scope are all governed by state law that varies widely — some states void non-competes outright, others enforce mandatory arbitration aggressively — so treat the score as a starting point for negotiation, not a verdict on what a court would do with your specific contract.
Legal Disclaimer
This calculator provides general estimates only and does not constitute legal advice. Laws, regulations, and court procedures vary significantly by jurisdiction. Consult a licensed attorney in your area for advice specific to your situation.
Inputs
Results
Contract protection score (0-100)
40
How to Use This Calculator
- Enter Base Salary, Bonus Target %, and Total Equity Grant value.
- Set Vesting Period in years and indicate whether the contract includes a Severance Clause.
- Enter Severance Weeks Per Year and indicate whether a Non-Compete is included.
- Set Non-Compete Duration in months.
- Review Total Compensation value over the vesting period.
- Flag any non-compete over 12 months or covering a national geographic scope — these face higher legal scrutiny.
How the result changes with Non-compete duration (months)
| Non-compete duration (months) | Contract protection score (0-100) |
|---|---|
| 6 | 45 |
| 9 | 40 |
| 18 | 30 |
| 30 | 30 |
What each input means
- Base salary ($)
- Annual base salary offered in the contract.
- Bonus target (%)
- Target annual bonus as percentage of base salary.
- Total equity grant ($)
- Total value of stock/option grants.
- Vesting period (years)
- Number of years for equity to fully vest.
- Has severance clause? (0/1)
- Does the contract include a severance provision?
- Severance weeks per year
- Weeks of severance pay per year of service.
- Has non-compete? (0/1)
- Does the contract include a non-compete agreement?
- Non-compete duration (months)
- Duration of the non-compete restriction.
- Has arbitration clause? (0/1)
- Mandatory arbitration waives your right to sue in court.
- Broad IP assignment? (0/1)
- Does the contract claim IP beyond work-related inventions?
What each result means
- Contract protection score (0-100)
- Higher = more employee-friendly contract terms.
- Total annual compensation ($)
- Base + bonus + annualized equity.
- Risk-adjusted compensation ($)
- Compensation discounted for restrictive contract terms.
- Severance value ($)
- Total severance payout if terminated without cause.
- Non-compete opportunity cost ($)
- Estimated income reduction during non-compete period.
- Negotiation upside ($)
- Potential value from negotiating better terms.
- Annual bonus ($)
- Target bonus amount per year.
- Annual equity value ($)
- Annualized equity grant value.
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersBase salary ($) = 75000, Bonus target (%) = 15, Total equity grant ($) = 0, Vesting period (years) = 4 = 10 input(s) provided
- Calculate Contract protection scoreContract protection score = 5040 = 40
- Calculate Total annual compensationTotal annual compensation = baseSalary + annualBonus + annualEquity86250 = $86,250
- Calculate Risk-adjusted compensationRisk-adjusted compensation = totalAnnualComp * (1 - riskDiscount)78487.5 = $78,487.5
Engine last updated . Checked against 4 independently-derived tests — how we verify calculators. Built by Paul Gunder, a software engineer, not a licensed financial, medical, or legal professional.
Frequently Asked Questions
Why does adding a severance clause add 20 points but removing arbitration only adds 10?
The point weights reflect how directly each clause affects your financial outcome if things go wrong. A severance clause guarantees a payout on termination without cause, so it carries the largest single weight (+20). Arbitration and IP assignment affect your legal leverage and personal-project ownership rather than a guaranteed dollar amount, so each is weighted at +10 for being absent and -5 for being present — a real distinction the calculator makes between direct financial protection and procedural protection.
How is the non-compete opportunity cost of 30% income reduction actually calculated?
The calculator takes your total annual compensation (base plus bonus plus annualized equity), divides it by 12 to get a monthly figure, multiplies by however many months the non-compete restricts you, then applies a flat 30% reduction factor. That 30% is a stated estimate of typical income loss while searching for a comparable role under a non-compete restriction, not a number derived from your specific industry or region, so treat it as a starting point rather than a precise forecast.
What does the risk-adjusted compensation figure actually discount, and by how much?
It discounts your total annual compensation by up to 15%, scaled to how far your protection score falls below 100 — the formula is (100 minus protectionScore) divided by 100, times 0.15. So a contract scoring 50 gets roughly a 7.5% haircut on paper compensation, while a contract scoring 100 gets none. It's a way of showing that two offers with identical salaries aren't equally valuable once contract terms are factored in.
Can the protection score ever go above 100 or below 0?
No. The score starts at a 50-point baseline, then adds or subtracts points for each clause (severance, non-compete presence and length, arbitration, IP assignment breadth), and the result is clamped with Math.max(0, Math.min(100, ...)) before being reported. So even a contract with every favorable term stacked on top of an already-high running total tops out at exactly 100, and one with every unfavorable term floors at 0.
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