Wednesday, April 23, 2008

Job Doesn't Pay Enough? Ask For a Signing Bonus!

If an employer wants you badly enough, you may be able to talk him or her into paying you a signing bonus. Signing bonuses are typically easier to negotiate than a higher salary, because an employer views a signing bonus as a one-time payment, rather than your reoccurring salary. Offering a signing bonus, rather than a higher salary, can be much less expensive for the company.

Signing bonuses have come to be seen as a sort of admission on the part of your employer that you are worth more than the job actually pays. This is information to keep in mind during your negotiations, as well as when you are asking for a raise down the line. If your employer thought that you were worth a little extra money to hire you, he or she might decide that it’s worth a little more to keep you on board.

Thinking you're worth a signing bonus is one thing. Requesting one may be downright awkward. Rather than asking if this position might carry a signing bonus, you might ask ‘what is the signing bonus?’ Just acting with confidence may be enough to carry you into negotiations, particulary if the salary is lower than what someone of your experience would be expected to make.

When negotiating a signing bonus, keep in mind that the IRS considers them regular income. And, if the IRS considers signing bonus income, so should you. That means you should set aside some money to help pay the additional taxes.

It’s up to you to negotiate the terms of your bonus. Most companies will include contingencies in your contract regarding your signing bonus. For instance, you might receive your bonus up front, but you would be required to return it if you leave the company within your first year. If you do decide to move on to a new job without completing the terms of your contract, you may be required to return either part of or the entire signing bonus.

Overall, signing bonuses can add that bump to your salary and benefits package to make employment with a specific company worth your while. You should realize, though, that a signing bonus is only a one-time payment. It may be better worth your while to find a company willing to raise your salary to convince you to take an offer, because, in the long run, you will typically make more.

3 comments:

blueberry said...

Nice idea. I'll try that signing bonus this year. Thanks!
Mary@Job Duties

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