Non-Compete Cost Calculator
Estimate the cost of a non-compete from salary, restriction period in months, and industry.
Returns lost income and total economic value you sign away.
Non-compete agreements restrict where you can work after leaving a company. They typically prevent you from working for a competitor, starting a competing business, or soliciting former clients for a specified period and within a certain geographic area. Understanding the financial impact helps you negotiate better terms before you sign.
The Formula:
Monthly Loss = (Current Monthly Salary) - (Alternative Monthly Salary)
Total Lost Income = Monthly Loss × Duration in Months
Where:
- Current Monthly Salary = your current annual salary divided by 12
- Alternative Monthly Salary = what you could realistically earn in a different field or a non-competing role during the restriction period
- Duration = the length of the non-compete restriction (typically 3 to 24 months)
Practical Example: You earn $120,000 per year as a software engineer. Your non-compete restricts you from working at any competing tech company for 12 months. The best alternative job you can find outside your field pays $70,000 per year. Monthly current: $120,000 / 12 = $10,000 Monthly alternative: $70,000 / 12 = $5,833 Monthly gap: $10,000 - $5,833 = $4,167 Total lost income over 12 months: $50,000
What to consider beyond the salary gap:
- Benefits loss: Health insurance, retirement contributions, and stock vesting may also be affected
- Career momentum: Time away from your field can set back your career trajectory
- Geographic scope: A nationwide restriction is far more costly than one limited to a single city
- Enforceability: Many states have limited or banned non-competes — check your state’s laws
Common non-compete durations:
| Duration | Typical Context |
|---|---|
| 3-6 months | Sales roles, entry-level positions |
| 6-12 months | Mid-level professionals, tech |
| 12-24 months | Executives, senior roles with trade secrets |
Negotiation Tips:
- Ask for a shorter duration or narrower geographic scope
- Request “garden leave” pay — the employer pays your salary during the restriction period
- Negotiate a larger severance package if the non-compete is non-negotiable
- Some employers will waive the non-compete if you are laid off rather than quit
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