Despite the current economic climate, there are still many companies hiring. Sometimes, a job offer can come with a sign-on bonus, or a one-time payment made to a new employee when signing on to work with the company. For example, if a company sees that you can provide a lot of value to their company or are considering multiple job offers, they may arrange this extra incentive to entice you to come on board. If you have received a job offer and an attractive sign-on bonus, here’s what you should know and consider before accepting.
Read the Fine Print
Before accepting a job with a sign-on bonus, make sure you are clear on the terms. You will want to make sure you understand how and when you will receive the bonus so there are no surprises.
Do you have to meet certain requirements, such as completing a provisional period before receiving the bonus? If you decide the job is not a fit and you leave, do you have to return the bonus? Are you missing out on other benefits by accepting the sign-on bonus?
Some companies pay the sign-on bonus in one lump sum after the new employee signs the paperwork for a new job. Others pay out the bonus in increments over the first year of the job. This depends on the company and circumstances. Ask the company for a copy of the paperwork for the bonus to read over and think about before accepting.
Are They Worth Taking?
Sometimes a company will offset a lower salary by offering a sign-on bonus to a new employee. They may also use a sign-on bonus to make up for benefits that you wouldn’t be eligible for as a new employee. These are both things to consider. After the sign-on bonus is paid out, will you be happy with the salary and the available benefits to you long-term? How long would you have to work there to get a pay increase or more benefits? While you don’t want to give the impression that the salary is the most important thing to you, you can inquire about the company policies and practices.
It’s also worth noting that you will have to pay taxes on the sign-on bonus. Many employers will do this for you. But when calculating the extra money you will receive, make sure you subtract out the taxes you will have to pay to have an idea of how much you will actually get from the bonus. This will allow you to have more reasonable expectations.
Should You Negotiate for a Sign-On Bonus?
Yes, it’s always good to negotiate the sign-on bonus, especially if you would prefer to have a higher base salary or other employee benefits. For example, you could negotiate a smaller sign-on bonus that would allow you to receive a higher overall salary as opposed to a bigger sign-on bonus and a smaller base salary. You could also negotiate a lower amount for a sign-on bonus in exchange for a certain employee benefit that you would prefer to have. Some companies will be flexible, and others cannot offer a higher base salary to new employees due to policy. That’s why it’s important to do your research to know what options are available to you.
You could also initiate the sign-on bonus proposal to the hiring manager. If they aren’t able to offer you some of the benefits or base salary that you are looking for, you could propose a sign-on bonus that would make accepting the job worth it to you. To do this, you need to be confident in your value and worth as a professional. It’s also important to know the average salary rates for your profession and experience. You can present this information to the hiring manager and propose that they include a reasonable sign-on bonus in the job offer.
What Industries or Jobs Offer Sign-On Bonuses?
Various industries may offer sign-on bonuses, but sometimes they are offered mostly to those in management and executive positions as opposed to new professionals entering the workforce. Of course, there are exceptions, especially if the professional has a certain high-level skill or knowledge that makes them more valuable to the company looking to hire them. You can research the company beforehand to see if sign-on bonuses are typically offered to incoming employees. You can also ask your network connections for information about common practices in the industry when bringing on new employees.
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