bonus questionHi, Are bonus considered part of a compensation? In other words, if I make $60K per year + 13% bonus, can I state that I make $68K? I am asking because I don't know what to say when I am asked about my current salary and my salary expectation. When calculating my new target range, should I calculate based on 68K or 60K?
Yes, bonus is included in compensation. However you need to be careful how the question in phrased. If they ask salary, then it is salary only. Even if they ask for "compensation", it is better to be clear what the components of "compensation" are.
Yes, it is compensation, but no, that's not what they mean. When they ask you should say "my salary is $X and I get a X% bonus." That way there's no confusion or backing yourself into a corner when they ask for proof.
Tess Sure! A bonus is "part" of your compensation package, but for the sake of clarity, you need to make sure that you make it clear which is which. Your salary is one component and any other dollars you receive are another - so make sure that you state what your actual salary is and, as a separate amount, what your bonus is. Don't combine 'em, in other words, and give the impression that your actual salary is higher than it is. Hope his helps. Paul W. Barada The Negotiation Expert Ok, thanks for clarifying. If I'm jobhunting, is it be reasonable to give a salary expectation that is +10% over the total compensation (salary+bonus)? And what about if my bonus has been X2 the last two years due to company's great performance? I would say no because by definition, bonus is extra, variable and subject to the whims of the company and the market. You should look for a salary (base) that is over what you're making but you can never count on a bonus either where you are or if you move somewhere else. They can promise you the moon on a bonus and you may never see it. Tess Nope, your anticipated salary should be AT LEAST 10% to 15% higher than your present salary - not counting any bonuses in the total. Bonuses are a function of performance and profitability and they're certainly not a guaranteed part of your earnings. You're trying to hike your anticipated salary higher than it should be by adding in a discretionary sum of money that the employer doesn't have to give you. Plus the fact that no two companies handle bonuses the same way and a ton of companies don't even have bonus programs. You can SAY that you're anticipating that's higher than you're salary plus bonus to an employer that says they have a bonus program, but you shouldn't base your anticipated salary on the sum of the two. Paul W. Barada The Negotiation Expert | |
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