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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. |