Should I negotiate base salary or bonus?
Bonus – Which Is Better? In almost all cases, your base salary is more important to negotiate for than other types of compensation in terms of long term importance and value. If in doubt, always negotiate for an increase in base salary above all else.
Should You Always Negotiate Salary? It's normal to ask for higher pay or more benefits before accepting a job offer. Most professionals agree that you should always negotiate salary when starting a new job. This is likely the easiest and most crucial time to talk about money.
You can almost never go wrong by negotiating salary. Many people are concerned that by asking for more money, they might lose the job offer — but that's almost never the case. After all, most job offers don't disclose the salary range upfront, so recruiters expect that you'll have to talk about it at some point.
Start with a figure that's no more than 10-20% above their initial offer. Remember, you're applying for entry level, and you shouldn't expect something on the higher range. Consider negotiating lower if 10-20% places you above the average.
Generally, a “good” bonus would be anywhere between 10-15%. However, a bonus of 15% would likely be considered more than good, as it's one of the highest percentages and somewhat rare.
It is simple: you can lose a job offer by negotiating salary if you make unreasonable demands or by going below what is expected of the request.
It really depends. Some people feel you should take the first offer if you're happy with it. Never negotiate just for the sake of negotiating. Other people disagree with that position and believe anytime you're given the chance to negotiate, you should.
“A stable pay rise is a much better option than a bonus. While employees may like a cash injection, a pay rise enables employees to plan their finances”.
Raises are a permanent increase in payroll expenses; bonuses are a variable cost and therefore give business owners greater financial flexibility when business is down. Bonuses can be tied to sales or production volumes to incentivize employees and help companies boost their profits during peak times.
Executives receive higher bonuses that can multiply based on performance, while most employees earn bonuses equal to 1% to 5% of their overall salary.
How do you negotiate a base salary offer?
- Become familiar with industry salary trends. ...
- Build your case. ...
- Tell the truth. ...
- Factor in perks and benefits. ...
- Practice your delivery. ...
- Know when to wrap it up. ...
- Get everything in writing. ...
- Stay positive.
I did want to let you know that I am considering a strong offer from another company right now. I have received another offer with a base salary of [$____]. I'm excited to be a part of your team and would be ready to accept your offer if you would be able to [MATCH OR EXCEED] this base salary.

Don't negotiate your salary until you have a firm offer. Don't try to get one company to match another company's offer. Don't rely on the estimates you see on a salary website. Don't fixate only on money.
A good bonus percentage for an office position is 10-20% of the base salary. Some Manager and Executive positions may offer a higher cash bonus, however this is less common. Some employers will not offer a cash bonus, and will offer a higher salary or other compensation – like stock options – instead.
The average year-end bonus varies by a number of factors, including what type of bonus is being given, the number of employees, and the company's profitability. A general estimate for an end-of-year bonus is between 5% to 10% of an employee's annual salary.
Just like commissions, bonuses are protected even if you are terminated. You are entitled to payment of your earned bonuses at the time you are fired, let go or quit your job.
Whether you're negotiating salary for a new job or you're asking for a raise, a "money conversation" in any professional context is downright awkward. If you're like most people, you'd rather accept what you're given — and resent it later — than make the ask.
But you should know that in almost every case, the company expects you to negotiate and it's in your best interest to give it a shot. In fact, a study by Salary.com found 84% of employers expect job applicants to negotiate salary during the interview stage.
Most hiring managers are willing to negotiate, so it's almost always a good idea to counteroffer. Even if they're unable to budge on salary, you might gain additional time off, a flexible schedule, or other perks.
- Express gratitude.
- Express your excitement for the offer.
- Make a very specific counteroffer based on market data and personal performance data.
- Use quantified professional achievements to communicate your value and support your counteroffer.
Who should make first offer in a salary negotiation?
Whoever makes the first offer, whether seller or buyer, is usually more effective in the negotiation. The power of first offers is strong thanks to the science of the anchor effect. Anchoring is an irrational part of human decision making—what's called a cognitive bias.
- List your accomplishments from the past six months, the past year and your time with the company. ...
- Know what a competitive salary looks like for your position. ...
- Let your boss know what's in it for them. ...
- Be confident. ...
- Provide your request in writing.
- Lack of credibility - Such prizes may not be taken as seriously as cash.
- Lack of employee awareness - Employees may be less conscious of the value of non-financial incentives over 'hard cash'.
If you are sure you have negotiated as hard as possible on salary, consider opening up a signing bonus negotiation. An employer that is reluctant to commit to a higher salary, one that will continue to rise during your tenure with the organization, may be more open to negotiating a one-time signing bonus.
Most employers give their employees an average increase of 3% per year. Consistent job switching may have an impact on the rate at which your salary increases.
While bonuses are subject to income taxes, the IRS doesn't consider them regular wages. Instead, your bonus counts as supplemental wages and can be subject to different federal withholding rules.
A Small Pay Raise Makes a Big Difference
While this is the average, a lesser amount would still make a massive difference to many people. A small pay raise of $1,000 annually would make a difference to about 20% of the employees.
A bonus is always a welcome bump in pay, but it's taxed differently from regular income. Instead of adding it to your ordinary income and taxing it at your top marginal tax rate, the IRS considers bonuses to be “supplemental wages” and levies a flat 22 percent federal withholding rate.
Employers usually consider their budget and whether they can afford to give everyone a bonus. There are no legal obligations for employers to give employees a Christmas bonus, however many choose to do so.
As mentioned, 5% of an employee's annual salary is the average amount awarded in a holiday bonus. However, the percentage may vary by company and by role. Generally, middle and senior managers see an end-of-year bonus of around 10-20% of their salary, and supervisors see around 10-15%, according to Salary.com.
Do you negotiate salary with HR or hiring manager?
If it's the HR person that you're interviewing with, a potential manager, or a higher level executive, that's fine. Go ahead and ask them about the salary range. However, if there's someone within the organization that would be at your level or lower that you're speaking to, it's not advisable to ask them.
“Thank you for getting in touch! I'm excited to review the details when I receive the written offer. The salary is a bit lower than I was expecting, so I'll need a few days to see if I can make it work.”
- Start by evaluating what you have to offer. ...
- Research the market average. ...
- Prepare your talking points. ...
- Schedule a time to discuss. ...
- Rehearse with a trusted friend. ...
- Be confident. ...
- Lead with gratitude. ...
- Ask for the top of your range.
- Put Your Number Out First. ...
- Ask for More Than What You Want. ...
- Don't Use a Range. ...
- Be Kind But Firm. ...
- Focus on Market Value. ...
- Prioritize Your Requests. ...
- But Don't Mention Personal Needs. ...
- Ask for Advice.
In our experience, most companies will happily negotiate salaries with their chosen candidate—even if they don't have another offer. While you may be nervous about negotiating, remember the hiring team selected you for the role because they believe you have the right experience and skillset.
I'm not comfortable sharing my current salary. I would prefer to focus on the value I can add to this company rather than what I'm paid at my current job. I don't have a specific number in mind for a desired salary, and you know better than I do what value my skill set and experience could bring to your company.
Countering a job offer multiple times may not be the best approach. Instead, prepare your salary expectations based on the value of your skillset and experience in the current market. Don't drag on the salary negotiation too long. Depending on the situation, two times is the most I would recommend.
If you're sure that you want to decline, consider saying something like this: "I appreciate the offer and your time, but I can't accept this position at the salary you're offering. If the salary range is something that can be negotiated, please let me know."
A bonus is a payment made in addition to the employee's regular earnings. Under the FLSA, all compensation for hours worked, services rendered, or performance is included in the regular rate of pay.
You receive a 10 percent bonus of your annual salary of $100,000, meaning a bonus of $10,000.
When should an employee get a bonus?
The type of bonus you receive will determine when it is paid out. Year-end bonuses are typically paid within the first few months of the new year. Annual bonuses may be paid at the same time each year, although the company typically sets the timeline for when they will be paid to employees.
If you give notice before bonuses are allocated and your last day is after they are paid, it is highly unlikely that your company will stiff you. Employers expect some increase in resignations after bonuses are paid anyway.
A standard clause for insertion into bonus documentation allowing an employer to recover cash amounts that have been paid where the company has had to restate its accounts or has become aware of serious wrongdoing by the recipient of the bonus.
It is no coincidence that companies often pay out annual bonuses around March 15th. In the case of a company with a calendar year tax year, paying bonuses by March 15 will generally allow the company to deduct the bonuses in the tax year which ends on the prior December 31.
Most hiring managers are willing to negotiate, so it's almost always a good idea to counteroffer. Even if they're unable to budge on salary, you might gain additional time off, a flexible schedule, or other perks.
- Start by evaluating what you have to offer. ...
- Research the market average. ...
- Prepare your talking points. ...
- Schedule a time to discuss. ...
- Rehearse with a trusted friend. ...
- Be confident. ...
- Lead with gratitude. ...
- Ask for the top of your range.
'” When it comes to setting compensation ranges, pay experts say the maximum should be about 40% to 60% higher than its minimum. For example, a job that pays a minimum of $50,000 should have a salary cap around $70,000 to $80,000.
Yes, a salary negotiation can backfire if the negotiation comes too early or if you agree to a verbal offer then ask for more money later. You should avoid trying to negotiate a salary before the company even offers you the position.
- Ask for time to make your decision. ...
- Conduct research on industry compensation. ...
- Assess your qualifications and experience. ...
- Review and evaluate the initial offer. ...
- Determine your counteroffer value. ...
- Submit your counteroffer. ...
- Prepare for the employer's response. ...
- Negotiate the offer as needed.
- Get your offer on paper. ...
- Research your realistic salary range. ...
- Figure out what your job priorities are. ...
- Talk up your skills and experience. ...
- Bring your W2. ...
- Take a collaborative, not combative, tone. ...
- Negotiate each term independently.
What to do when they won't negotiate salary?
Don't lose hope if the company rejects your salary negotiation and you still have to take the job. Be gracious in your reply while mentioning that the compensation was below expectations. And suggest compensation in other areas or future renegotiation opportunities.
So how aggressive should you be when negotiating salary? A good rule of thumb is to counter offer between 10% and 20% above the offer amount.
Demographic and market factors: Salaries are impacted by market and demographic factors like the availability of jobs, the number of available candidates for a particular job or the number of employees looking for the same education and skills.
While HR has the ability to create salaries as well as raise them, this is usually left to the employer. Employers typically prefer to handle salaries, as they are more motivated to restrict the funds that are going out of their company.
References
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