Sign on Bonus

A Sign on Bonus is usually presented as part of the compensation package proposed to a professional being offered a job at a company.  At one time, only high-level executives were offered a sign on bonus; however, they are commonly offered today to all professional levels.

A sign on bonus is normally offered by companies as part of a short term incentive compensation plan.  Because the bonus is a one time event, it enables the company to attract talent, while not adding to the long-term expenses of the company.  The sign on bonus is not part of the job applicant's base salary.

The sign on bonus is calculated as a percentage of the base salary, and is typically 5 to 20% of the starting salary offer, even for lower-level management positions.  The bonus may also be tied to employment at the company.  For example, by accepting a sign on bonus, the new employee may also agree not to leave the company for a specified period of time.