Yeah but they get taxed so much. I think I'd rather have it in my base salary. I'm might be kind of jaded too. In my past jobs were sold to me as if the bonus was a guaranteed part of the salary. Then you would rarely get anything or if they did pay out a bonus it would be much less than 100%.
At least in the US, bonuses are taxed the same as salary. It's just the withholding that is higher, but that only makes a difference until you file a tax return.
Yeah I was going to say that I'm not certain it's taxed more but it just seems like it is because I always end up with something like 50% of what the actual bonus was. Also healthcare and things are still deducted from the bonuses I've seen which I'm not sure is normal.
It just feels higher because you're seeing your marginal tax rate instead of average tax rate. If you get a raise and look at the paycheck before and after the raise, the difference in net pay vs gross pay will be similar to what you see with your bonuses. As the other commenter said, it doesn't change your total tax bill at the end of the year.
I don't know standard practices, but my last bonus check at federal income tax, social security, federal medicare, and state income tax deductions, but no deductions for insurance or anything (and I wouldn't expect to see those.) I do have deductions for my 401(k) and such, but that's still my money, just going to a different account.
Define "much less than 100%" Even for software management positions, I don't think I've ever seen a place that gives more than a 25% bonus and that would be considered very high.
When I say much less than 100% I mean 100% of the amount that the bonus is stated to be. For example if my bonus was 8% of my salary then the most I've ever actually seen paid out was 2-4% based on the company not performing as well as the plan calls for.
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Bonuses. Let me spend the money the way I like.
Yeah but they get taxed so much. I think I'd rather have it in my base salary. I'm might be kind of jaded too. In my past jobs were sold to me as if the bonus was a guaranteed part of the salary. Then you would rarely get anything or if they did pay out a bonus it would be much less than 100%.
At least in the US, bonuses are taxed the same as salary. It's just the withholding that is higher, but that only makes a difference until you file a tax return.
Yeah I was going to say that I'm not certain it's taxed more but it just seems like it is because I always end up with something like 50% of what the actual bonus was. Also healthcare and things are still deducted from the bonuses I've seen which I'm not sure is normal.
It just feels higher because you're seeing your marginal tax rate instead of average tax rate. If you get a raise and look at the paycheck before and after the raise, the difference in net pay vs gross pay will be similar to what you see with your bonuses. As the other commenter said, it doesn't change your total tax bill at the end of the year.
I don't know standard practices, but my last bonus check at federal income tax, social security, federal medicare, and state income tax deductions, but no deductions for insurance or anything (and I wouldn't expect to see those.) I do have deductions for my 401(k) and such, but that's still my money, just going to a different account.
Define "much less than 100%" Even for software management positions, I don't think I've ever seen a place that gives more than a 25% bonus and that would be considered very high.
When I say much less than 100% I mean 100% of the amount that the bonus is stated to be. For example if my bonus was 8% of my salary then the most I've ever actually seen paid out was 2-4% based on the company not performing as well as the plan calls for.