Some new hires may not plan to stay at the company beyond the contracted period required to receive the bonus and aren’t worried about other benefits. Some hiring bonuses are a percentage of the candidate’s annual compensation. For example, a candidate who makes $100,000 may receive a 10% signing bonus of $10,000. Let’s start by looking at a baseline example of a typical Big Tech job offer.

Need full-service 1-on-1 support to help guide you through your Big Tech salary negotiation?

Most will offer typical bonus amounts as well as salary and benefits information. You don’t need to be a software engineer or a finance guru to get one of these incentives. Research shows that bonuses have increased most sharply for occupations that don’t require a college degree. Sometimes, a sign-on bonus will be paid out over time rather than as a lump sum up front.

Choosing between two jobs to find a satisfying career

Bonuses are considered “supplemental wages” by the IRS and are subject to a higher withholding rate. I offer full-service 1-on-1 support to help Senior Software Engineers and Engineering Managers negotiate the best offer possible and with more confidence and less stress. Sign-on bonuses can vary from a few thousand dollars up into six figures.

How To Ask for a Signing Bonus

A software developer recently received an offer from a top tech firm with an impressive base salary, but no mention of a sign-on bonus. Knowing that competitors in the industry often provided sign-on bonuses, the candidate researched the company’s previous offers and found that sign-on bonuses were common in their field. The candidate then respectfully requested a sign-on bonus, explaining that it would help balance out the total compensation package and align it with industry norms.

Before accepting any offer, think about the pros and cons and accept perks that excite you. Yes, sign-on bonuses are generally considered taxable income and subject to federal, state, and local income taxes. Employers typically withhold taxes from sign-on bonuses at the time of payment, similar to regular wages.

When You’re Offered the Job

1. Year two, when your candidate sees her total cash compensation comprised only of the base salary in the absence of the sign-on bonus, she might feel underpaid or under-appreciated — or like she just received a pay cut.
2. Unlike a sign-on bonus, which is typically offered upfront, a retention bonus is contingent upon the employee remaining with the company for a predetermined duration, usually one or more years.
3. I want to express my gratitude for the offer extended to me for the [Position Name] role at [Company Name].
4. Please let me know a convenient time for a conversation or meeting.
5. Push back on lowball offers, especially if you know the company has the capital to pay you more, while remaining calm and collected.

In short, a sign-on bonus is extra money that an employer offers a new employee for accepting a job. Before the pandemic, sign-on bonuses mostly went to upper-level management (especially C-Suite members) and superstar employees who companies were hoping to recruit away from other employers. But today, sign-on bonuses are often the only way to hire enough employees due to continued labor shortages. To effectively negotiate a sign-on bonus, start by researching the industry standards and typical bonus amounts for your position. Next, make a case for why you deserve a bonus, considering your skills, experience, and the value you bring to the company.

Before telling candidates about your sign-on bonus, you need to decide on the amount. Again, signing bonuses range from a few hundred to tens of thousands of dollars (and up). You’re struggling to find good, quality candidates to fill an open position. Or, you’ve found the perfect candidate and want to sweeten the job offer.

So, you’re sold on signing bonuses and what they can do for your business. Now, it’s time to give the bonus—with a little prep work, of course. You may decide against giving signing bonuses to employees in high turnover positions or temporary workers. If you’re looking for a way to land that top candidate who may be weighing multiple job offers, consider sweetening your offer with a sign-on bonus. Perhaps during salary negotiations a candidate asks for a higher figure than you can afford or mentions that the benefits at their current employer are better.

Here are some key takeaways and examples to consider when navigating the world of sign-on bonuses. I appreciate your consideration of my request for a sign-on bonus, and I understand that there may be certain constraints or reasons that led to the decision not to include one in the initial offer. Your feedback is important to me, and I would like to better understand the rationale behind this decision, if possible. This insight will help me align my expectations and approach accordingly. I want to express my gratitude for the offer extended to me for the Senior Marketing Manager role at X Corporation. I am excited about the opportunity and the prospect of contributing to your team.

It should include the terms of the bonus — like when you’ll receive it and any limitations — so read it carefully. You should know what to expect and ask any questions before you formally accept the offer, which will help alleviate new job anxiety and set you up for success. An individual who receives a $10,000 sign-on bonus and is in the 22% federal tax bracket will pay $2,200 of the bonus in taxes, leaving only $7,800. In most states, state income tax would further lower the value of the $10,000 bonus.

If an employee quits within a certain period of time after accepting the position, they may be required to pay back all or part of the sign-on bonus. The last thing you want is to pay out a signing bonus (especially if it’s $75,000!) and watch the employee quit after a month. Recent research from Robert Half shows that employers in many sectors struggle to hire talent — 90% of technology managers, for example, said it’s challenging to find skilled professionals. In such a competitive environment, a sign-on bonus could tip the scales in your favor.

Sign-on bonuses also serve as an alternative to negotiating a higher salary, which can have long-term cost implications for an employer. By offering a one-time, upfront payment instead of increasing the annual salary, they can maintain sign on bonus meaning their budget and avoid potentially inflated future payroll expenses. But these bonuses appear anywhere, depending on the company, the position, and the state of the market.