Sign-on bonuses may be cash-only, which is generally the case for non-management employees or low-level managers, but they can also involve company stock or other asset incentives. They can be paid out all at once or incrementally across the course of the first year. The details will be outlined in the contract the employee signs at hiring. Sign-on bonuses can also be used to partially compensate workers for a lack of other benefits, like a 401k or health insurance, but they tend to be worth significantly less over the long term.

1. Employers give sign-on bonuses to attract staff for hard-to-fill job openings, especially during tight job markets or skills shortages.
2. Weigh the risk and reward, Herd suggested—not just the signing bonus, but work-life balance, the company’s trajectory, and your professional prospects.
3. I’m Josh Doody, a professional salary negotiation coach who helps High Earners negotiate their job offers.
4. Sign-on bonuses can vary from a few thousand dollars up into six figures.
5. A job offer could include both a signing bonus and a retention bonus.

Use severance package negotiation to ask for the compensation you deserve

When this is the case, there are a number of elements of an offer outside of salary that a candidate may place significant value on, and could carry more weight when deciding to join your team. For instance, you might offer more vacation time, higher bonus potential, or commuting reimbursement. A sign-on bonus is usually a one-time payment that won’t reflect in your future salary.

Here’s an example taken from a modified version of a real Big Tech job offer from one of my clients. This client was a very experienced software developer with substantial background in embedded systems. This offer is for $210,000 base salary, $400,000 total equity (vesting over four years), and a $30,000 sign-on bonus. They’re offering higher wages, hybrid or remote positions, and unique employee sign on bonus meaning benefits like gym memberships and tuition reimbursement.

Reasons Companies Offer Sign-On Bonuses

If your competitors are handing out generous sign-on bonuses, you might feel the need to match their offers or even increase the stakes. If the sign-on bonus becomes more than your company can afford, you may end up hurting your bottom line and hiring a worker whose value doesn’t justify the upfront cost. Some companies may require you to repay the bonus if you leave the company before a certain period.

You might even use a sign-on bonus as a way to negotiate a higher salary, offering to take a smaller bonus in return for higher base pay. Before you accept a job offer, read the fine print so you’re aware of the terms of the bonus and what you need to do to earn it. If so, you may be able to command a sign-on bonus in addition to pay and benefits. In addition to knowing the terms of the bonus, you’ll also need to take time to understand how the company will compensate you in the long run.

Ensure you’re aware of the repayment terms and conditions before agreeing to the bonus. In some cases, the employer may not have the budget or may believe that the candidate’s value does not warrant a bonus. It’s crucial to recognize when to accept the offer as is or continue looking for a position that better aligns with your expectations.

How Amazon uses sign-on bonuses

A generous sign-on bonus can make a job offer more appealing compared to offers from other companies. Some job search boards allow seekers to narrow the search by whether a position comes with a signing bonus. But if it’s not advertised, in general, our experts said you’ll want to ask for a signing bonus after the manager offers you the job and you receive the hiring package. When new employees come in with bonus money, at potentially higher salaries than existing employees, it can inadvertently start a chain reaction of turnover. Ultimately, a company could have to offer even more sign-on bonuses to be required and sink more money into training costs. Although a business can require a potential employee to sign a non-disclosure agreement, it’s very hard to keep that kind of news quiet in a workplace.

In some cases, these concessions can provide the value you’re looking for in the form of indirect compensation — something the employer may be much more open to. Be confident, and remember that you’re worth every penny you’re asking for. Push back on lowball offers, especially if you know the company has the capital to pay you more, while remaining calm and collected. If you’re at the negotiating stage, chances are you’re interested in the job, so stay respectful and make a good first impression.

I’m Josh Doody, a professional salary negotiation coach who helps High Earners negotiate their job offers. On average, High Earners improve their first-year compensation by $47,273 with my help. Salary, equity, performance bonuses and other forms of payment will generally account for the bulk of an employee’s compensation, but all of those things are usually paid out over time. With so many jobs offering sign-on bonuses, asking for or negotiating one doesn’t have to be daunting. It’s an indication that your potential employer already knows what you bring to the table — and that’s a good thing. If you’re searching for a job, a signing bonus is an exciting indication that an employer is eager to hire and onboard you.

An entry-level Software Engineer may get a sign-on bonus of $5,000 or so, while an Executive or Senior Leader at a Big Tech company may get a sign-on bonus of $100,000 or more. “You don’t want to leave money on the table, but you don’t want to ask for too much,” Herd said—particularly if you’re also attracted to how the company treats you and your enthusiasm about the position. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.

A sign-on bonus can be an attractive incentive when considering a new job opportunity. It’s a one-time payment you receive when joining a company, which can help cover relocation costs or serve as a cushion while adjusting to a new salary. Make sure you read the fine print on your sign-on bonus paperwork so you can properly negotiate the terms. If you’re accepting a lower salary or the omission of other benefits that you’re used to having at your current job, you need to know before starting the conversation. Leverage this information during the process to let your potential employer know what’s at stake.

For the Employee

This has less of a financial burden for your company in the long run. Handling a declined request for a sign-on bonus during negotiations can be disappointing, but it’s important to approach the situation professionally and strategically. I appreciate your consideration of my request and am eager to discuss this matter further. I am committed to finding a solution that benefits both X Corporation and myself. I look forward to the possibility of joining [Company Name] and contributing to its continued success. Before we finalize the details of my employment, I would like to discuss the sign-on bonus.

Consider this when budgeting and negotiating your salary for the long term. Sign-on bonuses are considered taxable income by the IRS, so the amount you see on the offer letter isn’t necessarily the amount you’ll actually receive. To avoid disappointment, make sure to understand how taxes will affect your bonus. To determine what’s reasonable for your industry, take a look at free salary calculators online.