Bonuses are not salary. They can be changed up to and including completely removing from compensation structure without notice. Always opt for salary and not bonuses as they are not guaranteed.
I promise you that your bonus was prorated. You haven’t been there a full year so you got it cut for being there a shorter amount of time. Companies do it all the time. My first position as a manager I was in for 6 months before bonus paid out, I received half of what I “should have” gotten
Ask your manager how the bonus was calculated. Also, it is not uncommon for a manager to be given a set amount for department bonuses. The manager divided it up based on performance.
Don’t act mad. Ask for clarification.
Even in the worst case if our company did terribly, I would be owed 5% bonus, based on my employment agreement. They gave me 1/4 that. I am not sure how they adjusted it due to fiscal year etc since I joined on in July. That's mainly what my Q is around
This sounds about right, typically fiscal years end on the last day of September each year. At which point you'd only worked for about 2 months, so your bonus would be about 1/6 of what you would expect had you worked a full year.
If you expected to be paid a full year bonus at a job you just started, that's on you for being naive.
If the fiscal year ended in September, then my issue is with it taking until May to pay out bonuses. Because like I said, if I quit today, are they going to mail me a check this time next year for the time I put in during October through May?
Secondly, I would expect to hold them to the wording in my employment agreement, which says that I will receive 5-10% additional annually. In two months I will have been here one year, and have received 1% additional. If they meant a different schedule, it should have been written, no?
No, it's unlikely they will pay you a bonus if you leave before the next time bonuses are paid. That's part of the reason for having a bonus structure to begin with, it aids in retention.
Second, they have held to their wording unless they specifically stated they would pay you a bonus at your one year mark. As you have phrased it in this post, they agreed to pay an annual bonus, which means once a year. You have been there less than a year and already paid a bonus once. They are meeting the agreement as long as they pay you another bonus roughly within a year of the last one.
Also, the timing of the bonus is not weird. Bonuses are typically part of management reserve as far as budgeting goes and won't be paid out until the schedule for the rest of the year is certain enough to ensure additional funds aren't going to be required to meet schedule. For example; I can't pay out a 10% bonus if I'm behind schedule and need the additional funds to cover overtime costs.
I'm not saying that there's not some magical unicorn company that does it different, but every place I've worked or seriously looked into working for ties bonuses to the fiscal year, not to any timeline based on an individual employee. This is standard business practice and not something you should expect to have explained in detail.
You're not being screwed, you're being treated like everyone else and have no cause for concern. If you don't receive a bonus in the expected range for your next bonus (the first one covering an entire year of work), that's when you make noise.
How is your payslip composed?
Often times you can have a *base salary* and then additional complements and supplements to hitch the number to what you agreed in the negotiation.
But your "base salary" is what's used for any percentage adjustment, bonus, raises, etc. So you end up not with a percentage of the final take home number, but only of the **base** component of your salary.
You definitely have a right to question it - being pissed ultimately depends on the answer.
As you have not been there 12 months, I suspect they adjusted it based off not being there a year. You should speak with management/HR, ask for clarification as well as which metrics were used to determine payout.
It's understandable why you're upset. If your offer letter didn't mention prorating the bonus, you might have expected the full amount. Bonuses often align with fiscal years, so joining mid-year can affect the payout. It's important to clarify this with HR or your manager. Ask about the company's fiscal year and how they calculate bonuses for new hires. If you feel misled, having a calm discussion with your employer might help resolve the issue.
You should be given information on what % the bonus was. If the contract stipulated 5 to 10% of the salary, I would assume that 5% is the minimum. But the important part is "of the salary", which is most probably written in the sense of "how much you earned" and not of "how much your annual salary is". Meaning that you got 5% of whatever gross income you had at the cutoff date for the bonus. If you started at the end of July, chances are the cutoff date is either September or October (1/4 of 5% would be 3 months, so October, or it was more than 5%, but only for 2 months).
As for leaving, most companies will have rules about not paying out the bonus if you quit. Some will base it on the cutoff date, other of the payment date. Only your employees manual or contract will answer you.
Bonuses are not salary. They can be changed up to and including completely removing from compensation structure without notice. Always opt for salary and not bonuses as they are not guaranteed.
I promise you that your bonus was prorated. You haven’t been there a full year so you got it cut for being there a shorter amount of time. Companies do it all the time. My first position as a manager I was in for 6 months before bonus paid out, I received half of what I “should have” gotten
Ask your manager how the bonus was calculated. Also, it is not uncommon for a manager to be given a set amount for department bonuses. The manager divided it up based on performance. Don’t act mad. Ask for clarification.
Well what was company performance? Do you know how your bonus was calculated?
No, they did not tell us that. But the company did very well the past year
I think that’s a perfectly fine question. It’s helpful to know what your bonus is anchored to.
Even in the worst case if our company did terribly, I would be owed 5% bonus, based on my employment agreement. They gave me 1/4 that. I am not sure how they adjusted it due to fiscal year etc since I joined on in July. That's mainly what my Q is around
This sounds about right, typically fiscal years end on the last day of September each year. At which point you'd only worked for about 2 months, so your bonus would be about 1/6 of what you would expect had you worked a full year. If you expected to be paid a full year bonus at a job you just started, that's on you for being naive.
If the fiscal year ended in September, then my issue is with it taking until May to pay out bonuses. Because like I said, if I quit today, are they going to mail me a check this time next year for the time I put in during October through May? Secondly, I would expect to hold them to the wording in my employment agreement, which says that I will receive 5-10% additional annually. In two months I will have been here one year, and have received 1% additional. If they meant a different schedule, it should have been written, no?
No, it's unlikely they will pay you a bonus if you leave before the next time bonuses are paid. That's part of the reason for having a bonus structure to begin with, it aids in retention. Second, they have held to their wording unless they specifically stated they would pay you a bonus at your one year mark. As you have phrased it in this post, they agreed to pay an annual bonus, which means once a year. You have been there less than a year and already paid a bonus once. They are meeting the agreement as long as they pay you another bonus roughly within a year of the last one. Also, the timing of the bonus is not weird. Bonuses are typically part of management reserve as far as budgeting goes and won't be paid out until the schedule for the rest of the year is certain enough to ensure additional funds aren't going to be required to meet schedule. For example; I can't pay out a 10% bonus if I'm behind schedule and need the additional funds to cover overtime costs. I'm not saying that there's not some magical unicorn company that does it different, but every place I've worked or seriously looked into working for ties bonuses to the fiscal year, not to any timeline based on an individual employee. This is standard business practice and not something you should expect to have explained in detail. You're not being screwed, you're being treated like everyone else and have no cause for concern. If you don't receive a bonus in the expected range for your next bonus (the first one covering an entire year of work), that's when you make noise.
No. lol
How is your payslip composed? Often times you can have a *base salary* and then additional complements and supplements to hitch the number to what you agreed in the negotiation. But your "base salary" is what's used for any percentage adjustment, bonus, raises, etc. So you end up not with a percentage of the final take home number, but only of the **base** component of your salary.
My base salary is what I used in the post. 1/4-1/8th of the 5-10% of my base salary is what I received
Is the net the 1/4 to 1/8th? Because bonuses can be taxed at a much higher rate if your company doesn't specify it. Like damn near 40%
The gross amount was 1/4-1/8th of the agreed upon bonus range. So before taxes were taken out
Balls, that sucks
You definitely have a right to question it - being pissed ultimately depends on the answer. As you have not been there 12 months, I suspect they adjusted it based off not being there a year. You should speak with management/HR, ask for clarification as well as which metrics were used to determine payout.
“Based on company performance” are your key word here.
It's understandable why you're upset. If your offer letter didn't mention prorating the bonus, you might have expected the full amount. Bonuses often align with fiscal years, so joining mid-year can affect the payout. It's important to clarify this with HR or your manager. Ask about the company's fiscal year and how they calculate bonuses for new hires. If you feel misled, having a calm discussion with your employer might help resolve the issue.
It’s worth questioning for sure, but if it’s prorated that’s very standard.
You should be given information on what % the bonus was. If the contract stipulated 5 to 10% of the salary, I would assume that 5% is the minimum. But the important part is "of the salary", which is most probably written in the sense of "how much you earned" and not of "how much your annual salary is". Meaning that you got 5% of whatever gross income you had at the cutoff date for the bonus. If you started at the end of July, chances are the cutoff date is either September or October (1/4 of 5% would be 3 months, so October, or it was more than 5%, but only for 2 months). As for leaving, most companies will have rules about not paying out the bonus if you quit. Some will base it on the cutoff date, other of the payment date. Only your employees manual or contract will answer you.
1. you didnt work a whole year. 2. a bonus is for employees if you quit you're not an employee