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What, if any, are the common obligations that come with signing bonuses? I have heard in casual discussion that you will have to repay a signing bonus if you quit a job within six months or a year and this makes me feel like there are certain rules attached to them.

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You're asking what the downside of getting money is? Without knowing the details of your contract there's no way to answer your question. –  MrFox Nov 12 '12 at 18:51
    
@suslik I shall edit my question –  Paul Brown Nov 12 '12 at 19:09
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I don't think there's any answer beyond "read the contract", there may well not be any standard rules and any given company may have exceptional rules. –  Rarity Nov 12 '12 at 19:20
    
@Rarity So should I simply delete the question and save you the effort? –  Paul Brown Nov 12 '12 at 19:24
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@PaulBrown I think this is a valid question but phrased poorly. I would re-phrase it to be, "What are factors to consider when accepting a signing bonus?" because this would be a question worth asking and one which would fit here well. –  enderland Nov 12 '12 at 19:44
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closed as too localized by MrFox, pdr, ChrisF, Yannis, animuson Nov 13 '12 at 4:45

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2 Answers

up vote 3 down vote accepted

The "rules" attached to a signing bonus, if any, will depend on the agreement you sign with the company. The most common condition of payment is tenure-based; you have to remain employed long enough to have been worth the company's money in the first place. At the very least, you usually have to complete some "probationary period" (most employees, whether they know it or not, begin their jobs under probation so it's easier for the company to call it off if they aren't doing the job). Sometimes, the signing bonus is paid in installments; half up front, a quarter at 3 months and the rest at 6, or in thirds, or whatever.

It's very, very rare to be offered money just for saying yes with absolutely no strings attached; in that instance they're basically betting that you want the job as much as you want the money and so there's a built-in incentive for you to stick around long enough to pay them back in services rendered.

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Obviously, there can be different terms and in combination may indicate this is a bad job that is going about handling their high turnover rate the wrong way.

  1. Size of bonus. Who wouldn't stay for 6 months for an additional 50% to their salary? Most positions will never have to worrry about this.
  2. Competitive level of salary minus the bonus. Some companies like a startup may not be able to put together an anual salary that is competitive so they've tried to make it more attractive by providing cash up front. The downside is, your raise is probably a percentage of base salary. A too low of a salary where bonuses and raises are based, limits the compounding factor on future income potential.
  3. Length of the terms. Over three months seems close to trying to lock you in. Anyone who stays somewhere less than this is really hurting their career beyond the size of the bous.
  4. Stage of career. This can be a huge benefit to someone just starting out.
  5. Possible way to help someone who is relocating, so it's not really a bonus. They should reimburse you for the expenses (I think this is a tax break as well).
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