Author Topic: X-Mas/ Year end bonus... How did you do?  (Read 23421 times)

trailrated

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X-Mas/ Year end bonus... How did you do?
« on: December 24, 2014, 09:35:50 AM »
Does your company offer one? How well did you make out this year? What are you planning on doing with it?

Philociraptor

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #1 on: December 24, 2014, 09:36:29 AM »
No. $0. Nothing.

trailrated

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #2 on: December 24, 2014, 09:57:24 AM »
This is mrmoneymustache.com, so if you did anything with your bonus other than contribute it to an investment account, you might want to consider punching yourself in the face. ;-)

I can't really relate when people ask what I plan to "do with" certain sums of money. I don't have cash flow problems, so if I want to buy something, I just buy it, without being dependent on waiting for any future income.

Well said :)

I'm a red panda

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #3 on: December 24, 2014, 10:47:20 AM »
No such thing as a holiday bonus in my industry. (At least not in the 4 companies I've worked for.  One gave us "the gift of time"- which was 4 hours off a day a week before Christmas)

Rural

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #4 on: December 24, 2014, 10:51:44 AM »
"Bonus"?

Workinghard

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #5 on: December 24, 2014, 10:54:05 AM »
I got $2300 pretax! I called payroll  because I thought they made a mistake in my paycheck only to find out they decided to pay out my PTO since it's the last check of the year. Next year I'm per diem. More for savings! However, I may take  some cash since I always put my extra  or overtime into savings. I don't need or want anything, but it would help alleviate guilt IF something came up later in the year.

MrFrugalChicago

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #6 on: December 24, 2014, 11:04:23 AM »
0 because I switched from a financial company where I got 15-30% salary in bonus, to a startup where I get $0 bonus but have a lot of equity in the company. If the company does well I end up ahead $ wise, if not I end up behind.. but either way I have better quality of life with this job, so worth it.

MoneyCat

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #7 on: December 24, 2014, 11:09:08 AM »
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

CheapskateWife

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #8 on: December 24, 2014, 11:10:24 AM »
No bonus, but I got a job!  Woo hoo!


rob in cal

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #9 on: December 24, 2014, 11:13:40 AM »
Well, some customers do give extra big tips around this time of year.  If a customer wanted to make sure I got a special tip though, that might be difficult since they might not order on a night I'm working, but its great that all of us drivers benefit from people's generosity.  Around Christmas time people have friends and family over and so orders are bigger, and this just helps to enhance the overall tip level.  One other form of a year end bonus would be my share of ownership income at the restaurant is probably a little higher in November and December than other months.

aetherie

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #10 on: December 24, 2014, 11:16:08 AM »
Yes. $2000. Straight to the 401k.

Middlesbrough

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #11 on: December 24, 2014, 01:13:58 PM »
I was only full time for half the year last year and got a small bonus.

This year was a good year and I tried to extrapolate last year's data to this year. Got blindsided by a extremely large bonus. I was happy to have it, but I was told about it after my deadline for withholding more to my 401k. So today's paycheck all went to the 401k, but I will still end up slipping up a tax bracket. Face punches and jubilations all around.

JeffC

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #12 on: December 24, 2014, 04:39:16 PM »
I don't get any kind of bonuses at work(professor) but I do get 3 weeks off which I am thoroughly enjoying.  My side hustle selling my art on Etsy and in galleries did well though, about 4k in December. All of it after taxes is getting heaped onto my house down-payment 'stache.  I talked my siblings into no longer exchanging presents.  That is sort of like a bonus to me.


Primm

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #13 on: December 24, 2014, 08:00:23 PM »
The parents of one of the babies I look after gave us a box of Christmas themed Krispy Kremes. Does that count?

Davids

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #14 on: December 24, 2014, 08:05:15 PM »
We get our bonuses in April.

MrFrugalChicago

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #15 on: December 24, 2014, 08:20:36 PM »
"Bonus"?
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

Bonuses are a tool that favour employers, not employees, so you should be happy not to get one.

Imagine if your employer withheld half your pay every check, and instead of paying it throughout the year, paid it all in a lump sum at the end of the year. Then further imagine that if your employer was not satisfied with your performance, they could retroactively halve your pay by never paying you out the half they withheld over the course of the year.

Yes, that's what a cash bonus is: a tool whereby an employer defers pay and reserves the right to cancel it entirely. Compensation structures that include a bonus are bad for you as an employee, not good. Bonuses are not magical free money on top of your normal pay; in industries like finance and software engineering, they are a part of your normal compensation structure, but paid on a deferred basis.

Kind of. But they are also a way good employees get rewarded. I remember getting a 30% bonus when coworkers got 15%. Hey at a 100k base, that's 15k of money for working hard all year. Made me feel appreciated.

Gray Matter

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #16 on: December 25, 2014, 05:04:09 AM »
Big fat zero.  I am saving 100% of it.

Welcome to the non-profit world.  The only moment of regret I've had is on December 15, when my bonus in my old job (25% of salary) would have paid out.  Oh well.

Pooperman

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #17 on: December 25, 2014, 07:54:54 AM »
I worked 6 months, got 1/2 the normal (10%) bonus: $3,000. Got an 8% raise too! It's going to:  e-fund, 401k, uncle sam, next year's IRA.

kudy

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #18 on: December 25, 2014, 08:24:17 AM »
I received a 0.90% "holiday bonus" this year - little extra on my paycheck. 20% went to 401k, 40% went to tax withholding.

Spork

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #19 on: December 25, 2014, 08:42:22 AM »
"Bonus"?
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

Bonuses are a tool that favour employers, not employees, so you should be happy not to get one.

Imagine if your employer withheld half your pay every check, and instead of paying it throughout the year, paid it all in a lump sum at the end of the year. Then further imagine that if your employer was not satisfied with your performance, they could retroactively halve your pay by never paying you out the half they withheld over the course of the year.

Yes, that's what a cash bonus is: a tool whereby an employer defers pay and reserves the right to cancel it entirely. Compensation structures that include a bonus are bad for you as an employee, not good. Bonuses are not magical free money on top of your normal pay; in industries like finance and software engineering, they are a part of your normal compensation structure, but paid on a deferred basis.

You are spot on with this... and I'll add one more thing:  From a salary point of view, you are losing the "compounding interest" effect.  I.e., if you get a 4% raise every year -- the raise is based on a smaller base.

BUT... having said that:  My current employer (smallish) does not do bonuses.  My previous employer (gargantuan) did do bonuses.  Previous employer paid 20% more THEN put a bonus in there -- for yearly pay rate that was close to 30% higher.  I'm not sure there is a conclusion to draw there... just an observation.

Rural

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #20 on: December 25, 2014, 08:43:25 AM »
"Bonus"?
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

Bonuses are a tool that favour employers, not employees, so you should be happy not to get one.

Imagine if your employer withheld half your pay every check, and instead of paying it throughout the year, paid it all in a lump sum at the end of the year. Then further imagine that if your employer was not satisfied with your performance, they could retroactively halve your pay by never paying you out the half they withheld over the course of the year.

Yes, that's what a cash bonus is: a tool whereby an employer defers pay and reserves the right to cancel it entirely. Compensation structures that include a bonus are bad for you as an employee, not good. Bonuses are not magical free money on top of your normal pay; in industries like finance and software engineering, they are a part of your normal compensation structure, but paid on a deferred basis.

You are spot on with this... and I'll add one more thing:  From a salary point of view, you are losing the "compounding interest" effect.  I.e., if you get a 4% raise every year -- the raise is based on a smaller base.

BUT... having said that:  My current employer (smallish) does not do bonuses.  My previous employer (gargantuan) did do bonuses.  Previous employer paid 20% more THEN put a bonus in there -- for yearly pay rate that was close to 30% higher.  I'm not sure there is a conclusion to draw there... just an observation.


Larger employers pay more. :-)

Spork

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #21 on: December 25, 2014, 08:50:47 AM »
"Bonus"?
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

Bonuses are a tool that favour employers, not employees, so you should be happy not to get one.

Imagine if your employer withheld half your pay every check, and instead of paying it throughout the year, paid it all in a lump sum at the end of the year. Then further imagine that if your employer was not satisfied with your performance, they could retroactively halve your pay by never paying you out the half they withheld over the course of the year.

Yes, that's what a cash bonus is: a tool whereby an employer defers pay and reserves the right to cancel it entirely. Compensation structures that include a bonus are bad for you as an employee, not good. Bonuses are not magical free money on top of your normal pay; in industries like finance and software engineering, they are a part of your normal compensation structure, but paid on a deferred basis.

You are spot on with this... and I'll add one more thing:  From a salary point of view, you are losing the "compounding interest" effect.  I.e., if you get a 4% raise every year -- the raise is based on a smaller base.

BUT... having said that:  My current employer (smallish) does not do bonuses.  My previous employer (gargantuan) did do bonuses.  Previous employer paid 20% more THEN put a bonus in there -- for yearly pay rate that was close to 30% higher.  I'm not sure there is a conclusion to draw there... just an observation.


Larger employers pay more. :-)

That was my suspicion.  I just didn't think my experiments with n=2 were enough to draw that conclusion.  :)


MikeBear

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #22 on: December 25, 2014, 08:52:58 AM »
Our bonus (IF we get one, it's based on company performance for the year) isn't paid out until around April or May. If so, it'll be around $1,500 or so.

I temp jack my 401k percentage up enough to grab it all, otherwise 40% of it goes to taxes.

G-dog

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #23 on: December 25, 2014, 09:36:37 AM »
We get our previous year's bonus/variable pay mid-February the next year. Lots of factors, but if all hit their target, I get 9% of salary.

Other than occasionally buying something small (new pair of unnecessary shoes), the money just goes to the bank. I have 401k pulled out of the bonus check as well as regular checks (you can set it up either way).

KeeKat

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #24 on: December 25, 2014, 09:46:48 AM »
This year we received a whopping 6 days worth of pay, which equals out to about 2% of pay before the 40% taxes. After it also pulled my 11% 401K contribution, there wasn't too much left over, but what was is sitting happily in my e-fund.

Chrissy

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #25 on: December 25, 2014, 10:05:07 AM »
$2035 was the take home.  We get about that amount every year.  It's not a bonus though, it's more like... a residual.  In any case, I didn't work for it.

I spent half on Christmas travel & gifts for the family, and put half in savings.

I'm debt free, and I've been semi-retired for 7 years.

kpd905

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #26 on: December 25, 2014, 04:19:13 PM »
$0.

tofuchampion

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #27 on: December 25, 2014, 04:37:30 PM »
$100, same as everyone else every year.  I put it towards debt.

Herbert Derp

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #28 on: December 25, 2014, 06:09:13 PM »
I have a bonus roughly every six months, this one was a little over 13K

MBot

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #29 on: December 25, 2014, 07:41:09 PM »
Two bonuses, each $200. Both right to paying off a student loan.

BadStache

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #30 on: December 25, 2014, 09:36:46 PM »
8% bonus (finance industry).  23% 401k, the rest to a wood stove we are installing so we can cut our own firewood and decrease our dependence on natural gas.

ash7962

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #31 on: December 26, 2014, 12:34:46 PM »
"Bonus"?
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

Bonuses are a tool that favour employers, not employees, so you should be happy not to get one.

Imagine if your employer withheld half your pay every check, and instead of paying it throughout the year, paid it all in a lump sum at the end of the year. Then further imagine that if your employer was not satisfied with your performance, they could retroactively halve your pay by never paying you out the half they withheld over the course of the year.

Yes, that's what a cash bonus is: a tool whereby an employer defers pay and reserves the right to cancel it entirely. Compensation structures that include a bonus are bad for you as an employee, not good. Bonuses are not magical free money on top of your normal pay; in industries like finance and software engineering, they are a part of your normal compensation structure, but paid on a deferred basis.

I agree that my bonus is a tool that my company can use to withhold some pay that I might otherwise get, but I am ok with that.  I work for a trading firm and they already pay me a good salary for what I do (software dev), and in addition to that I get a bonus which is based on how well the company did and my personal performance.  I think its a great system.  If we have a bad year and they give me no bonus then I'm still getting paid a great salary.  If we have a bad year then the company can choose how much money they can afford to dish out while still staying in business, but if we have a great year then I get a great bonus on top of my already great salary.  I feel like this increases my job stability because they can make decisions about how much they can pay out on a year by year basis instead of being locked into all employees having a higher salary.  Its also fairly motivating because if the firm does well, everyone does well, and we all know that.  I also happen to know how our company performs since I have to work on or troubleshoot our profit/loss webpages once in a while, and past experience has shown that the firm partners are very generous and fair with bonuses.

LokiMom

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #32 on: December 27, 2014, 04:00:52 PM »
$0.00

I guess they think the 2% merit raise this year (1st one in 5 years) was enough to keep the serfs grateful.  Earlier this year the Wall Street Journal commented on our CEO's $10 million bonus. 

mm1970

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #33 on: December 27, 2014, 04:01:16 PM »
So, I got a bonus.  Note: I haven't had a raise in 3 years, and I've only ever gotten one bonus, well, ever.

I appreciate the sentiment anyway.  The money is in my account.  I will probably not spend it.

mm1970

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #34 on: December 27, 2014, 04:05:40 PM »
"Bonus"?
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

Bonuses are a tool that favour employers, not employees, so you should be happy not to get one.

Imagine if your employer withheld half your pay every check, and instead of paying it throughout the year, paid it all in a lump sum at the end of the year. Then further imagine that if your employer was not satisfied with your performance, they could retroactively halve your pay by never paying you out the half they withheld over the course of the year.

Yes, that's what a cash bonus is: a tool whereby an employer defers pay and reserves the right to cancel it entirely. Compensation structures that include a bonus are bad for you as an employee, not good. Bonuses are not magical free money on top of your normal pay; in industries like finance and software engineering, they are a part of your normal compensation structure, but paid on a deferred basis.
Yes.  I work for a startup company that is hemorraging money.  No raises, no bonuses, nothing, nada - oh but when we hire people to replace those who quit, they get market rate (aka 20 to 30% more than the rest of us).

So we got a new CEO (that took our raise money) and a new VEEP.  The VP really pushed a bonus structure for meeting goals (which is incentive, and better than what we had, which was nothing).  Here's the kicker - the bonus structure/ incentive is ONLY for director level and above, not for manager and below, and WTF do you think the engineers who are actually designing, building, producing, fixing things are doing all day??  I learned about this from my director who told me he'd share his bonus if he got it, since I was essentially doing all the work.

stlbrah

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #35 on: December 27, 2014, 04:06:54 PM »
Rumor has it that it will only be 3.x % dumped into an IRA. It was 7% last year, but I still consider 3% of your salary to be good.

Also got a 3% raise which I also felt was nothing to complain about being that the promotion I got was a horizontal move into a more luxurious lower-stress position.

Johnez

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #36 on: December 27, 2014, 04:08:30 PM »
Got my PTO cash out, which was nice.  Was told "You guys are getting it in a separate check so taxes won't hit it as hard," of course along with half the stuff coming out of Stupid-visor's mouth-proven incorrect.  Will try to be saving the maximum amount of PTO for maximum cash out next year.  Should be nice, hopefully 10 days worth.

netskyblue

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #37 on: December 27, 2014, 04:16:22 PM »
$184.70.  No idea where they got that amount from. 

MrFrugalChicago

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #38 on: December 27, 2014, 05:34:58 PM »
Was told "You guys are getting it in a separate check so taxes won't hit it as hard," of course along with half the stuff coming out of Stupid-visor's mouth-proven incorrect.

You are correct in that it will not change your year end bill to uncle sam.

Supervisor is correct in most pay programs will use a given paycheck to project forward your yearly tax rate. So if your normal check is 2k and a bonus check is 2k...  a combined check of 4k would end up projecting you make nearly double what you really do, causing that single paycheck to have a little bit higher tax withholding. (Which you will get back at taxtime or you can change deductions to get it back sooner).

Yes it is more a dumb spin for people bad at math, but like most spin it is 10% right....

BlueMR2

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #39 on: December 28, 2014, 06:37:54 AM »
Pretty good.  Our owner is very generous.  I know the company is having to reinvest a lot as it continues to grow, but he carved out a nice little chunk so everyone could have a nice little bonus (we got ours back around Thanksgiving).

Of course, I didn't spend it, but temporarily put it in savings while I gather together money for a new investment.

The big downside though is that then at Christmas we all got socked with the huge healthcare increases this year which ended up being way beyond what the company could hope to absorb...  So, I'll be making a good chunk less money next year...

Knapptyme

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #40 on: December 28, 2014, 09:17:58 PM »
As a private high school teacher for the past ten years, bonuses are odd. Sometimes students (basically their parents) gift teachers with something. Sometimes that happens to be gift cards (other times it's baked goods). We try to be economical with their uses, but they are basically funding unnecessary purchases. These bonuses can occur at Christmas or at the end of the school year. I might have earned an aggregate of $100-$200 this year. It's small, but I'll take it.

My employer, on the other hand, used to give us school-crested gifts at Christmas-time. This year--$50 cash (or about 0.1% for me). Everyone employed received the same amount.

Can any of that be considered a bonus?

Bill76

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #41 on: December 29, 2014, 08:56:58 AM »
My employer's fiscal year ends in September, so we got our incentive plan payouts (technically not a bonus) in November.  My payout is currently sitting in savings.  My wife is starting a new business, so I'm keeping a bit more in cash reserves than I otherwise would.  If the business doesn't require a cash infusion after Q1 2015, I'll put the money into the Roth IRA and post-tax investments.

JLee

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #42 on: December 30, 2014, 07:26:54 AM »
Does your company offer one? How well did you make out this year? What are you planning on doing with it?

Bonus? LOL.

Are you hiring?

boyerbt

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #43 on: December 30, 2014, 07:36:18 AM »
"Bonus"?
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

Bonuses are a tool that favour employers, not employees, so you should be happy not to get one.

Imagine if your employer withheld half your pay every check, and instead of paying it throughout the year, paid it all in a lump sum at the end of the year. Then further imagine that if your employer was not satisfied with your performance, they could retroactively halve your pay by never paying you out the half they withheld over the course of the year.

Yes, that's what a cash bonus is: a tool whereby an employer defers pay and reserves the right to cancel it entirely. Compensation structures that include a bonus are bad for you as an employee, not good. Bonuses are not magical free money on top of your normal pay; in industries like finance and software engineering, they are a part of your normal compensation structure, but paid on a deferred basis.

It isn't that way in all cases. Our company offers bonuses twice a year based off a shared rewards program so your bonus, if any, is dictated by the livelihood of the company. If we had a good year (like this year) our shared rewards pool is larger and therefore offers a larger pool of money. My salary is not based off of this.

That being said - I received roughly $4k in bonuses this year and they went towards repaying my student loans.

ToughMother

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #44 on: December 30, 2014, 07:41:21 AM »
My co worker gave me a small thing of chocolates.  That was a very nice bonus.  Oh and I had to pitch in $$$ for my boss and his assistant.  Also a nice bonus.

Spork

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #45 on: December 30, 2014, 10:36:35 AM »
"Bonus"?
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

Bonuses are a tool that favour employers, not employees, so you should be happy not to get one.

Imagine if your employer withheld half your pay every check, and instead of paying it throughout the year, paid it all in a lump sum at the end of the year. Then further imagine that if your employer was not satisfied with your performance, they could retroactively halve your pay by never paying you out the half they withheld over the course of the year.

Yes, that's what a cash bonus is: a tool whereby an employer defers pay and reserves the right to cancel it entirely. Compensation structures that include a bonus are bad for you as an employee, not good. Bonuses are not magical free money on top of your normal pay; in industries like finance and software engineering, they are a part of your normal compensation structure, but paid on a deferred basis.

It isn't that way in all cases. Our company offers bonuses twice a year based off a shared rewards program so your bonus, if any, is dictated by the livelihood of the company. If we had a good year (like this year) our shared rewards pool is larger and therefore offers a larger pool of money. My salary is not based off of this.

That being said - I received roughly $4k in bonuses this year and they went towards repaying my student loans.

Thats actually what Cathy was saying (I think).  Your salary is not based on the bonus.  Your annual income is.

An example to clarify:
salary: $60k
bonus: $4k
income: $64k

Had they given that money to you as salary...   They'd be on the hook to pay you $64k again next year.

and if you get a 4% raise every year... Your next year's salary will be $62.4k.  Had they paid the bonus as salary instead of bonus, your next year's salary would have been $66.5k.  The difference becomes VERY apparent over time due to compounding of salary over the years.

No one will argue with a nice check every year.  But a bonus is a way to increase employee happiness while paying them less over time. 

drak0017

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #46 on: December 30, 2014, 10:48:54 AM »
$0, BUT  in 2015 my employer is reinstating a 3% 401(k) match for salaried employees, which they suspended years before I arrived.  I'll take it! :)

boyerbt

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #47 on: December 30, 2014, 01:33:00 PM »
"Bonus"?
What's a "year-end bonus"?  Is that something rich people get for jobs that involve pushing papers around?

Bonuses are a tool that favour employers, not employees, so you should be happy not to get one.

Imagine if your employer withheld half your pay every check, and instead of paying it throughout the year, paid it all in a lump sum at the end of the year. Then further imagine that if your employer was not satisfied with your performance, they could retroactively halve your pay by never paying you out the half they withheld over the course of the year.

Yes, that's what a cash bonus is: a tool whereby an employer defers pay and reserves the right to cancel it entirely. Compensation structures that include a bonus are bad for you as an employee, not good. Bonuses are not magical free money on top of your normal pay; in industries like finance and software engineering, they are a part of your normal compensation structure, but paid on a deferred basis.

It isn't that way in all cases. Our company offers bonuses twice a year based off a shared rewards program so your bonus, if any, is dictated by the livelihood of the company. If we had a good year (like this year) our shared rewards pool is larger and therefore offers a larger pool of money. My salary is not based off of this.

That being said - I received roughly $4k in bonuses this year and they went towards repaying my student loans.

Thats actually what Cathy was saying (I think).  Your salary is not based on the bonus.  Your annual income is.

An example to clarify:
salary: $60k
bonus: $4k
income: $64k

Had they given that money to you as salary...   They'd be on the hook to pay you $64k again next year.

and if you get a 4% raise every year... Your next year's salary will be $62.4k.  Had they paid the bonus as salary instead of bonus, your next year's salary would have been $66.5k.  The difference becomes VERY apparent over time due to compounding of salary over the years.

No one will argue with a nice check every year.  But a bonus is a way to increase employee happiness while paying them less over time.

I might not be understanding it correctly but I will try to explain how I read Cathy's response. My boss did not reduce my salary or withhold any of my pay to magically "create" my bonus as Cathy said. The bonuses are the additional profits throughout the year. I understood and agreed to my salary of $XYZ when I joined the company with an understanding of our shared rewards program. You cannot pay a bonus as a salary that is based on the profits of that year. Businesses do not operate this way as we cannot predict how the market will be next year.

I might be misunderstanding because I do not look at my bonuses from last year and expect my year-end salary to be equal to or more than the previous year. Now if I received a year-end bonus each year at something like 10% then I would agree. The company obviously has the funds set aside (or at the least have them planned into the budget) but choose to disperse the funds as bonuses which helps them in the long run due to the annual rise of salaries due to cost of living adjustments. I don't believe that shared rewards play into this the same way.
« Last Edit: December 30, 2014, 01:36:23 PM by boyerbt »

Cpa Cat

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #48 on: December 30, 2014, 01:39:29 PM »
I thought I didn't get a bonus, but then I found a chocolate bar and a candy cane under some papers on my desk.

Woo woo!

Mommyof2

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Re: X-Mas/ Year end bonus... How did you do?
« Reply #49 on: January 05, 2015, 08:16:45 PM »
I work in sales - you earn a bonus on all revenue over quota for the quarters individually and then for the year.  Given I am a very high producer, puts me about 100k over some of my peers.