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Signing Bonus

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Signing Bonus

A Contract Covers a Signing Bonus as Does a Job Offer Letter

Pali Rao
Definition:

A signing bonus is a lump sum of money that an employer provides a prospective employee. The purpose of the signing bonus is to entice the applicant to sign-on with the employer’s organization. The signing bonus is most often used with executive level positions or to recruit employees with special, hard-to-find skills. The signing bonus is also used, on occasion, to recruit high potential students out of college.

The signing bonus is useful when an employer wants to recruit a candidate when other employers may be competing for the same potential employee.

A signing bonus is also useful to help a candidate bridge the gap between the salary that he or she wants and the offer that is on the table.

The advantage of a signing bonus for the employer is that it is a one-time payment. The employer has not added that extra compensation to the company’s bottom line as a recurring annual expense.

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Also Known As: sign-on bonus, recruiting bonus
Examples:
Gerald decided to accept the job offer when the signing bonus raised the amount of salary in the offer to the compensation level he desired.
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