Sign-on bonuses: everything you need to know

What is a sign-on bonus?

When scrolling through job opportunities, you may see positions that advertise sign-on or signing bonuses for a lump sum. The offer may seem attractive, but what is a sign-on bonus, really, and what should you know before you accept a job that offers one?

A sign-on bonus is an incentive that companies add to certain jobs in order to attract applicants. The bonus itself is different from a performance or yearly bonus in that you are on track to receive it once you “sign-on” (in other words get hired) for that position.

Why do companies offer sign-on bonuses?

It may seem odd for companies to offer lump sums of money to applicants they have just hired, however if you look at the reasons they do this it does make sense.

Companies can choose to offer sign-on bonuses for a variety of reasons including:

• There aren’t enough qualified applicants for that job
• They want to prevent turnover in a demanding job
• There are significant risks associated with that job’s duties
• To make a lower paying job more attractive to applicants.

Essentially, companies use sign-on bonuses to make a job seem more enticing to applicants.

When do I get my sign-on bonus money?

This will vary based on the terms of the offer that comes with your sign-on bonus. Many employers will have conditions for the sign-on bonus offer, whether that be until the end of a probationary period, a performance or sales target it met, or until the end of your training period.

If you’re expecting someone to write you a check for your sign-on bonus at the time you “sign-on” you’re likely to be disappointed. So keep your expectations in check and read the fine print of your offer and/or ask your hiring manager to know when you can expect to receive your sign-on bonus and the requirements to qualify for the payment.

How much will I get from a sign-on bonus?

Sign-on offers vary, but generally employers indicate the amount right in the job application you fill out, and can range from $200 to over $10,000 based on the industry, company, and the requirements or terms to receive the bonus.

Another important thing about sign-on bonuses is that they do not represent the actual amount you will receive in your bank account. Like all bonuses, sign-on bonuses are taxed at 22% of their value. This means that if you receive a $1,000 sign-on bonus with your next job, you can expect to actually receive an amount around $800 when your sign-on bonus is paid to you.

Where are sign-on bonuses offered today?

1. Sign-on bonuses for retail and warehouse jobs

Featured sign-on bonus employer: BJ’s Wholesale

With the #coronavirus pandemic, it became clear that retail and warehouse workers make up the backbone of commerce in stores. Through the pandemic and the risk of contracting coronavirus from customers, retail workers continued to show up for work. Warehouse workers have also dealt with a huge influx of orders and worked long hours to meet demand for customers.

Despite their importance during this pandemic, there are still challenges in enticing workers to take up these jobs due to the potential health risks and intense physical demands involved. In response, **retail and warehouse companies have started to offer sign-on bonuses of up to $500 to applicants in these sectors. **

2. Sign-on bonuses for trash pickup and recycling jobs

Featured sign-on bonus employer: WM - Waste Management

Workers in this industry have always had one of the most hazardous jobs in the country. Aside from the physical demands workers in this industry face, coming into contact with waste during the coronavirus pandemic also means a trash pickup or management worker could be exposed to coronavirus at any time.

For workers looking to break into this industry, the potential health risks may seem to outweigh the rewards, which is why some **trash pickup and recycling companies have started offering substantial sign-on bonuses for prospective applicants, up to $3,000. **

3. Sign-on bonuses for sales jobs

Featured sign-on bonus employer: Carmax

For those in the sales industry, sign-on bonuses are a common addition to many applications. Sales-people often have product specific insights and demanding workloads and sales targets, with pay that can vary based on commission.

Finding proficient sales-people with both the specialized knowledge to sell your product and the ability to commit long hours to close deals can be difficult and employers often add upfront benefits like a sign-on bonus to attract the best talent.

4. Sign-on bonuses for health and pharmacy jobs

Featured sign-on bonus employer: CVS

Health and pharmacy workers are needed now more than ever as the pandemic continues to put unprecedented strain on this industry. With many medical professionals facing burnout from long work hours and fearing coronavirus infection themselves, employers in this industry are offering sign-on bonuses up to $3,000 to entice medical and pharmacy workers to apply for these crucial positions.

5. Sign-on bonuses for trucking and CDL driving jobs

Featured sign-on bonus employer: US Xpress

With many now relying on delivery for their daily needs, keeping supply lines refreshed is a highly valuable service to society. With the high time commitment required from many trucking jobs, however, employers in the trucking and delivery industries are offering high sign-on bonuses to truckers who are up for the task. **Some sign-on bonuses for trucking jobs can reach up to $18,000! **

What are your thoughts on sign-on bonuses? Share in the comments below.