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This is similar to questions in here and here. I have verbally accepted the offer, my next step is to formally sign the offer online.

Though I know it's unprofessional to renegotiate after verbal acceptance but I feel the relocation bonus offered is not up to my expectations.

I was told over the phone that I will be offered $X as part of relocation bonus. However, the wording on offer goes like this -

Within 30 days of commencement you will receive a one-time cash payment as a relocation bonus of the amount of $X subject to tax and other withholdings as required by law.

The info that $X is after taxes was not mentioned over the phone. I believe I can renegotiate on this particular clause so that I can get a relocation bonus of the same amount after taxes and all. Should I go ahead?

Thanks!

  • Was the relocation bonus not part of the offer that you already accepted? Normally, that would be part of the offer that you already accepted. If you wanted to negotiate on that, it should have been done as part of negotiating the offer. – Justin Cave Jul 17 '15 at 21:38
  • While discussing on the phone, I was told that they will offer the relocation bonus of $X. They however did not mention anything to it. Also I have only accepted the offer verbally, I am yet to formally sign the offer. – adifire Jul 17 '15 at 21:40
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    I cannot imagine ever even considering that this would be an after taxes number, how would they know what you will be paying in taxes as that depends on many things they woudl not have access to such as your personal deductions. I'd say you had unrealistic expectations. – HLGEM Jul 17 '15 at 21:55
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    You didn't specify where you live, but in the United States if the move is far enough and you stay employed in that region long enough you can deduct moving expenses. So keep good records – mhoran_psprep Jul 17 '15 at 23:01
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    @JoeStrazzere Obviously, this is the sort of thing that calls for professional advice. There may be a difference between expense reimbursement and a bonus that is being treated as wages for tax purposes. – Patricia Shanahan Jul 18 '15 at 14:32
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The assumption that any payment from an employer to an employee is taxable and that the employer is quoting the pretax number is pretty basic. Employers generally don't know (or care) what tax bracket you're in, what deductions and credits you're eligible, or what states you might owe taxes in so they have no way to know how much of your salary or bonus you'll have to pay. Since they didn't say anything to indicate that the relocation bonus would be an after-tax figure, you're going to make yourself look bad if you try to re-open negotiations after agreeing to the offer already.

How bad this will make you look is dependent on a number of factors. If you've just graduated, this is your first interaction with the joys of taxes, and you really need the extra money in order to relocate successfully, it's a lot easier to apologize for making a poor assumption and ask for a bit more relocation assistance. If you've got 20 years of experience in your field, on the other hand, a desire to renegotiate is going to be a lot more problematic. People are a lot more forgiving of mistakes by entry-level workers than senior-level workers.

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    It's difficult to actually accept an answer in this situation, but my case is very close to what Justin explained. I am graduating next month and I now have another offer in hand, plus this phone conversation I had happened just before me rushing off to the airport to catch a really long flight (west to east) and hence I had this impulse reaction to accept the offer which regrettably I shouldn't have. I now plan to take the approach suggested by @JustinCave and see how things goes. – adifire Jul 18 '15 at 16:10
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The info that $X is after taxes [sic] was not mentioned over the phone

If you accepted the offer on the mistaken assumption that $X is the amount you would get after tax but is in fact the figure before tax, and you are open about this then it would probably not make you appear shifty to try to renegotiate - but it might be a minor mark against your judgment, especially for a role which commands a relocation bonus, to have made that assumption in the first place.

Should I go ahead?

We cannot answer this for you. It depends on your circumstances.

If you cannot afford to relocate without this extra money, then it sounds like you have no choice but to renegotiate.

However, if you can afford to relocate without then you should be very cautious about renegotiating:

  • If the answer is 'yes' and you use the money for anything other than relocation expenses there may be consequences, depending on your contract and/or jurisdiction.
  • If that figure doesn't budge, they restate the original offer and you accept anyway, then it looks like your negotiating position was not serious.
  • By attempting to renegotiate, you may implicitly reject the offer made. Be prepared for the answer to be 'no' and for that offer to go away. You've not handed in your notice yet or booked your tickets, right?

You need to have a very clear idea of what your expenses are likely to be, what you need, and what pre-tax amount that implies. You do not necessarily need to break that down at this stage but be prepared to answer on the spot if $Y is good enough for any value of $Y between $X and the amount accounting for tax that you ask for.

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The info that $X is after taxes was not mentioned over the phone. I believe I can renegotiate on this particular clause so that I can get a relocation bonus of the same amount after taxes and all. Should I go ahead?

You could try. And you could plead your lack of tax knowledge as the reason. But unless you are willing to walk away from the job over the amount of taxes due on the relocation bonus, you have no leverage.

In my experience, companies don't like to renegotiate after an offer has been accepted. For me as a hiring manager, it's a terrible way to start a job - it signals that you either don't think things through completely, or you are high-maintenance.

I'd be surprised if the company went back on their offer, so I don't think either way would be fatal. I wouldn't take this route, but it's certainly your call. For me, it seems like it would be a very small amount of money to walk away from a good job, and not worth doing.

In the future, try to make sure you understand all aspects of an offer before you accept, so you won't run into a similar uncomfortable situation.

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Yes. Please do so.

A lot of dirty negotiation tactics involve leaving out details over the phone. You probably have a good gut feeling whether this was intentional or just something they forgot to mention.

If it's intentional, don't let them manipulate you.

If it's not, bring it up. Misunderstandings are perfectly good negotiation reasons. But just don't keep renegotiating too much.

From a personal perspective, I don't mind one renegotiation if there was a mistake. But if someone keeps doing it multiple times for whatever reason, it starts to make them look shifty. So if you have other issues bring them up then and there.

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