Sign-on Bonus : Now or later?

[Angry Birds]

I'm in my last year of residency and found a job for next year. They offer a sign-on bonus. I haven't yet asked when I get it.

How many of you got your sign-on bonus immediately? How many of you had to wait till your first paycheck, i.e. after working a few shifts?

Thanks!

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[SeekerOfTheTree]

I'm in my last year of residency and found a job for next year. They offer a sign-on bonus. I haven't yet asked when I get it.

How many of you got your sign-on bonus immediately? How many of you had to wait till your first paycheck, i.e. after working a few shifts?

Thanks!

You'd be taxed less if you took it in residency.

 

[Arcan57]

It's a signing bonus, so I'd expect to get it after you sign the contract. But I'd ask. The period between last resident paycheck and first attending pay check may be 45 days with a lot of expenses during that time, so if you're not getting the bonus prior then I'd build up a warchest from moon-lighting.

 

[RustedFox]

Got mine with my first paycheck.

 

[Alvarez13]

Out of curiosity, what are the details of these signing bonuses? Is it a percentage of your salary? I'm guessing you have to stay with the group for a certain amt of time indicated in your contract; are most contracts 1 year or more? Do most places offer them?

No need to give your exact details, but just wanted to get some general ideas of what to look out for.

 

[The White Coat Investor]

You'd be taxed less if you took it in residency.

Only if you got it before December 31st of your last year.

 

[Arcan57]

Out of curiosity, what are the details of these signing bonuses? Is it a percentage of your salary? I'm guessing you have to stay with the group for a certain amt of time indicated in your contract; are most contracts 1 year or more? Do most places offer them?

No need to give your exact details, but just wanted to get some general ideas of what to look out for.

They're usually a fixed dollar amount. They vary from $0 to $30k (usually) with most being in the 10-20k range (at least in the Southern area of the country). Expect them with a CMG, don't expect them with a small democratic group.

 

[jendc08]

I got one from a cmg but not till my first paycheck . Up to $5000 of it could be used for moving expenses so at least that part was tax free. That was the only benefit of the delay.

 

[Apollyon]

****ty big CMG (bucket of dingus losers) gave me first half up front, and second half after 30 days on the job.

 

[WilcoWorld]

Only if you got it before December 31st of your last year.

I'm sure you know this, but it's slightly more complicated and actually depends on whether (residency income from January-July) + signing bonus + (attending income from start date-December 31st) = big enough to bump up your tax bracket. I was in a lower tax bracket my 1st year out than I was during my 2nd year out.

 

[link2swim06]

I'm sure you know this, but it's slightly more complicated and actually depends on whether (residency income from January-July) + signing bonus + (attending income from start date-December 31st) = big enough to bump up your tax bracket. I was in a lower tax bracket my 1st year out than I was during my 2nd year out.

Even then only a minimal portion of that is taxed in the higher bracket rate. It's only going to be 10k or so taxed at a few higher percent.

 

[Perrin]

Depends on your situation. I didn't get mine until I started. However, my fiancé had already moved there and started working 4 months earlier. I moonlighted a bunch to cover moving expenses and rent on both houses.

My roommate signed and got his (large) bonus in Dec of 3rd year. 4 months later he finds a spot at a place much better located geographically. It's a sweet deal, but he's already spent some of the sign on money paying bills and paying off his truck. Thankfully the new shop offered to pay off his spent bonus money and deduct it from the bonus they offered. He got pretty lucky with that.

If you sign and get the money early, don't spend any of it unless you are 100% sure you won't change your mind. Even then, I would save it. You are going to have unforeseen expenses such as new state licensing or moving. You'll probably have to work a month or more until you get your first paycheck.

 

[The White Coat Investor]

I'm sure you know this, but it's slightly more complicated and actually depends on whether (residency income from January-July) + signing bonus + (attending income from start date-December 31st) = big enough to bump up your tax bracket. I was in a lower tax bracket my 1st year out than I was during my 2nd year out.

You're very unusual to have made more money in your first half year out + last half year of residency than your first full year out. The above poster is right that only the income over the threshold is taxed at the higher rate.

 

[WilcoWorld]

You're very unusual to have made more money in your first half year out + last half year of residency than your first full year out.

I didn't say this, how did you conclude it?

 

[WilcoWorld]

Even then only a minimal portion of that is taxed in the higher bracket rate. It's only going to be 10k or so taxed at a few higher percent.

Agreed.

 

[The White Coat Investor]

I didn't say this, how did you conclude it?

You're right you didn't. I misread (and reversed) what you actually wrote.

 

[acceptmeplease]

If you are strapped for cash, sign your w4 so that you have 10 dependents. The taxes on your first check/bonus check will substantially drop.

Legally, you can change your w4 anytime.

Where I work, we can change our w4 online and it goes into effect the same pay period. There is even a model that shows the adjusted tax figures.

I would not recommend doing this a lot, for obvious reasons. I've only done it for my bonuses and when I had a ton of overtime and wanted to splurge on something.

 

[Groove]

I received my sign on with my first paycheck. Actually, half was with signing and half upon first pay check. My second one is supposed to come with my first paycheck but I haven't been paid yet.

I would have a lawyer look over your contract and/or negotiate a vesting component to your sign on. Most CMG clauses that mention the sign on will mandate full repayment if you terminate the contract at any point. There are also no mentions of things such as if you are injured and disabled temporarily, etc.. In my opinion, it's a little unfair to have to pay back the full amount if you say... completed 23 months of a full term contract but were told by your new group "We need you next month at the very latest". Extenuating circumstances, etc.. I didn't go overboard but I had vesting language added that vests half at one year and pro rata for the rest.

 

[pagemmapants]

Got mine the month after I signed the contract, still in residency. Went a long way toward relocation expenses, and I got it taxed in a year full of residency salary instead of the half-and-half year.