Signing Bonus

A signing bonus (also called a sign-on bonus) is a one-time cash payment offered to a new employee when they accept a job offer. It's typically paid at hire or within the first 30-90 days. **Why employers offer them:** - To compensate for unvested equity or bonuses being forfeited at the previous employer - To be competitive when the base salary is constrained (sign-on can bridge the gap) - To close on a candidate who has competing offers - Sector norms (signing bonuses are standard in consulting, investment banking, tech) **The clawback clause:** Almost all signing bonuses include a repayment clause: if you leave before 12 or 24 months, you owe back the bonus (prorated in some cases, full repayment in others). Read this carefully — it creates real financial lock-in. **Tax treatment:** Signing bonuses are taxed as supplemental wages — typically withheld at a flat 22% federal rate plus state taxes. The net amount is significantly less than the gross. A $30,000 signing bonus may net $18,000-$22,000 after taxes. **When to ask for one:** - You're leaving unvested equity, an upcoming bonus, or accrued PTO at your current employer (a signing bonus can offset this loss) - The base salary offer is below target and they can't move the base - You have competing offers (creates leverage) **Negotiation:** If salary is constrained, a signing bonus is often easier to grant — it's a one-time cost and doesn't raise the salary baseline that affects future raises and bonuses.