Vocations · Certifications · Return on investment

When does
the credential
pay you back?

Put the cost, the study hours and a realistic raise side by side. The estimator gives the payback time and what the credential is worth over the years you count.

Run the numbersWhat you get

The return estimator

The worked example uses example pay figures for a project management credential. Nothing you type leaves this browser.

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What you get

Vocations · CertificationsFree

What you finish with
The payback time, the net gain and percentage return over the years you count, the value today at a discount rate, the gain per study hour and a year-by-year table. It prints as a summary and downloads as a spreadsheet.
Who it is for
Working adults and career changers deciding whether a certification is worth the money and the evenings, and students comparing credentials.
Format
Browser calculator for a phone, tablet or computer, by touch or keyboard. Prints a summary; downloads a spreadsheet (.csv); export and import a file.
Access
Free. No account, no sign-in and nothing to install. Everything you type stays in this browser; nothing is sent to Caveat.
Where it lives
The Certifications space in Caveat Vocations.
Support
Questions, a correction or a request: team@caveatacademic.com.

How to use it

  1. Total the cost to earn it, less anything your employer pays.
  2. Estimate the raise from postings or a pay scale, with and without the credential.
  3. Add the yearly upkeep: renewal fees and continuing education.
  4. Choose how many years to count.
  5. Compare the payback with how long you expect to stay in the field.

Run the numbers

How the return is counted

Cost now, gains later, and why later dollars count a little less.

The worked example: a project management credential costing $1,380Raise per year$4,000before tax− Upkeep$70renewal, spread= Yearly gain$3,930what you keepCost ÷ gain4 mopayback timeThe worked example: a project management credential costing $1,380Raise per year$4,000before tax− Upkeep$70renewal, spread= Yearly gain$3,930what you keepCost ÷ gain4 mopayback time
Payback is the cost divided by the yearly gain; the return counts every year you choose.

Payback and return

The yearly gain is the raise less the upkeep. Payback is the cost divided by that gain, in months. The net gain over the years you count is the gain times the years less the cost, and the return is that net gain as a share of the cost.

Value today

A dollar four years from now is worth less than a dollar today, because today’s dollar could be saved or invested. Discounting divides each year’s gain by (1 + rate) raised to the year, the method federal agencies use for cost-benefit analysis. At 0% the value today equals the net gain.

Sources

  1. U.S. Bureau of Labor Statistics. Certifications and licenses: earnings by certification status, Current Population Survey (bls.gov/cps/certifications-and-licenses.htm).
  2. U.S. Office of Management and Budget. Circular A-94: Guidelines and discount rates for benefit-cost analysis of federal programs (whitehouse.gov/omb).
  3. U.S. Department of Labor, CareerOneStop. Certification Finder and Salary Finder (careeronestop.org).
  4. Brealey, R. A., Myers, S. C., and Allen, F. Principles of Corporate Finance. McGraw-Hill. Payback and net present value.

The worked example’s pay and costs are examples, not figures for any real credential. Your entries stay in this browser. Support: team@caveatacademic.com.