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How To Ask For a Signing Bonus: A Step-By-Step Guide

Andrew Langat
July 19, 2023
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You have just received a job offer after a tough interview process. This is exciting and marks the end of an often challenging phase. As you prepare to accept, there's one aspect of a salary offer that can sweeten the deal and make it more enticing: a signing bonus.

A well-negotiated signing bonus can be the icing on the cake before you start your new job.

Whereas signing bonuses have traditionally been used to lure top executives or hard-to-find employees, they are becoming commonplace.

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How Does a Signing Bonus Work?

A signing bonus is a one-time payment offered by an employer to a new employee as an incentive to join the company. This payment is usually an add-on to make the compensation package more attractive.

Signing bonuses can be paid as a lump sum or stock options, and the timing of the payment can vary depending on company policy.

For example, some companies may opt to stagger the payment, while others may pay them after 90 days or with the first paycheck.

Like other forms of compensation, signing bonuses are taxable. So you have to report the lump sum on your tax return when you file them. If the signing bonus is paid with regular pay, it’s taxed as ordinary income. If not, it's taxed as supplemental wages.

Employees getting a signing bonus

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How to Ask for a Signing Bonus (8 Steps to Follow)

Companies do not always offer bonuses or signing bonuses when an employee joins, but it doesn't mean the offer is off the table. So if you received a job offer and you're discussing all the details with the hiring manager, you can bring up the sign-on bonus question.

Here are some tips on how to ask a hiring manager for a signing bonus:

1. Wait for the formal offer.

Before requesting a signing bonus, it is important to first receive a formal written job offer from the employer. It is also important to note that this differs from a verbal offer that might be made in person or through a phone call.

This typically includes employment information such as job title, salary, benefits, and other important details such as performance expectations.

2. Express gratitude and enthusiasm.

As part of good practice, always say thank you after receiving a job offer. Reiterate your interest in the position and the company.

This sets the pace and the tone for the next engagement. It not only shows your communication skills but also gives the message that you are a lovely person to communicate with.

An example of gratitude is, "I'm calling to express my thanks for your consideration and the offer for this position."

3. Choose the right time to negotiate.

Again, wait until the employer has expressed strong interest in bringing you on board by extending the offer.

This is important as the employer already sees you as the best person available for that position – and communicated that to you with the offer

If you wait until you start the job, it might be too late.

4. Explain your reasons for requesting a signing bonus.

Most employers are willing to sit down and listen to your reasons for requesting a signing bonus. Some of the reasons you can give can include:

  • High-demand skills: If you have high-demand skills — skills coveted by employers — you can leverage them.
  • Forgoing other job opportunities: When you have multiple job offers, you can make this known to the employer – as well as that a signing bonus will help you take their offer.
  • You need to offset the cost of relocation: If your employer does not offer relocation reimbursement, a signing bonus can help offset this cost. According to the American Relocation Association, the average cost for relocation ranges from $24,000 for renters to $97,000 for homeowners.

5. Consider the overall package.

Remember to look at the entire compensation package, including the base salary, health insurance benefits, stock options, and other perks. Sometimes a signing bonus amount may pale in comparison to the overall package and this should inform your signing bonus negotiation.

For example, if your employer offers a merit-based salary increase and you are confident in your abilities, you may feel better about accepting an offer if they say no to a signing bonus.

6. Understand the value you bring to the company.

You probably will be asked this question during the interview phase: "What value do you bring to the table?"

If your employer agrees with your value proposition, you can leverage it to negotiate.

During the negotiation, be clear on what value you bring to the company.

An example of this can include:

"In my career, I have achieved win-win outcomes for clients and company through effective communication and strategic problem-solving skills. I intend to offer the same in this new position."

7. Quote a specific amount & justify.

Have a set number in mind before going for a signing bonus negotiation. This figure should be based on your experience, your skillsets, and general industrial standards. You then use these numbers to determine the potential bonus you deserve.


"After carefully weighing the opportunity and the benefits I will offer, I'm enthusiastic about the prospect of working with you and your team. I would be interested in a sign-on bonus in the neighborhood of $5000 considering the distinctive abilities and experience I bring to the table."

8. Get it in writing.

Having an agreement that clearly stipulates an agreed signing bonus maintains clarity and prevents misconceptions. Moreover, it also provides legal protection in case your employer negates the agreement. Additionally, a written agreement helps both parties understand their obligations and commitments, fostering transparency and trust.

This might interest you: How To Negotiate Your Salary

two person having a conversation

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Why Do Companies Offer Signing Bonuses?

Companies offer signing bonuses for a variety of reasons, including:

1. To fill hard-to-staff positions.

In the technological age, companies are facing a challenge in finding skilled professionals to fill positions. To give them a competitive edge, a signing bonus offer will tip the odds in their favor and help in warding off competition. Hiring specialized workers with hard-to-find skills is a case in point.

Moreover, employers offer signing bonuses to also attract top talent, so-called superstar employees.

2. To bridge the employer-employee gap.

During salary negotiations with an employer, a candidate may ask a potential employer for a higher salary and the company cannot afford it. So the employers offer signing bonuses. And a typical signing bonus can reassure the job seekers that the hiring company is willing to provide additional packages, extra money, or other benefits on a lower salary.

Companies considering making up the difference with a sign-on bonus make the entire offer more appealing. This incentive will help firms close the margin between the employer's offer and the employee's desired salary. Also, as an added advantage for companies, it's a one-time payment.

This might interest you: 10 Ways to Negotiate a Job Offer

3. To recognize employees' worth.

Professionals want to be rewarded, but they also like to feel wanted. If you know that a candidate is in high demand and considering other offers, a sign-on bonus sends a powerful signal that you highly value them and are willing to go the extra mile to bring them on board.

4. To incentivize performance.

A company can use a signing bonus to incentive performance in two ways. First, tying the bonus to defined performance expectations that an employee must attain. Second, offering a staggered payment based on an employee's performance level.

For example, offering a signing bonus of $5,000 for a sales representative with $2,500 as a starting bonus being paid out after the first year of employment and the remaining $2,500 paid after realizing performance targets.

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Company offering a signing bonus to employee

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What Are the Pros and Cons of Signing Bonuses?

Pros of Signing Bonuses

Companies can derive benefits from providing their employees with a sign-on bonus. Skilled professionals available in the job market are few and most companies are trying to get that edge to attract top talent to their ranks. A sign-on bonus is a great way to accomplish this.

Here are some pros of signing bonuses:

1. It's a one-time payment.

Money can turn heads, and to companies, this is no different. Companies don't like losing money, so some would like to avoid engaging in signing bonus negotiations. But the signing bonus amount is paid only once.

A signing bonus is a one-time payment, not a recurring one. This means companies do not have to pay the bonus over and over again. The one-time signing bonus will keep the company's overhead expenses low and their budgetary allocations annually will remain low. It has less financial burden on the company in the long run.

2. It attracts top talent.

The most talented individuals in the professional environment will always go for a new employer if it's a company offering vacation pay along with a much higher salary and benefits package. With many competing offers, the company with the best offers always attracts top talent.

If a company provides candidates with a signing bonus, that could give the new employee the boost they need to cover a lot of financial expenses. And it could be exactly what companies need to convince that person to sign a contract with them.

3. Expense control.

Some companies think that they have to pay a higher annual base salary instead of negotiating or offering signing bonuses. Even though paying a competitive salary is a way of convincing individuals to sign a new job or offer with the company, a salary is a long-term expense. It could impact the company significantly, particularly if they are overpaying for multiple positions.

Instead, they might want to convince someone to sign up with the company by offering sign-on bonuses. This is an upfront expense instead of a long-term cost, meaning that it is not going to hold the company down for very long. It could be a way to separate them from other similar companies in the industry while keeping expenses under control.

Cons of Sign-on Bonuses

Some of the cons of sign-on bonuses include:

1. Employees may collect the bonus and leave.

Some employees will join a company just to collect the sign-on bonus and leave, or they will do the bare minimum in order to collect the money. They may perform well for a month or a year and then quit and leave.

The worst-case scenario is when the sign-on bonus kicks in on the first day and on the second day they leave. This could be a potential liability for hiring an organization. So it's advisable to structure the contract well for the hiring organization to avoid such drawbacks.

2. Additional costs.

Before a company makes an official offer, they set up some money for salaries and bonuses for new hires. Even though it's a one-time payment, it is a significant addition to the budget. For example, if a company is hiring a bunch of new employees at the same time, the signing bonuses are going to add up quickly, potentially taking resources from other areas of business.

Companies need to consider the big picture before putting signing bonuses on the offer sheet.

3. Inequality in payment.

Conversations among employees within the company are common and talk of compensation packages may come up. This may create animosity between employees and middle management.

Some employees may get upset that other teammates got a larger or lower sign-on bonus. Or perhaps they learn they received a lower-than-typical signing bonus, a lower-than-expected salary, or they may not have gotten the financial incentive at all. This may cause problems or interfere with the workplace environment.

Employees are going to be paid what they can negotiate. Some employees are better negotiators than others, which means that companies may have some employees who get larger signing bonuses than others. If employees start to find out about this, they could get upset with one company or another, and the animosity could be turned toward the top executives.

This might interest you: What are the qualities of a good workplace?

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Looking to be a better negotiator? Let Highrise teach you how.

Learning how to negotiate, including how to ask for a signing bonus, can be a pivotal moment in your career journey. By following the strategies outlined in this article, you can confidently approach this discussion and increase your chances of securing a favorable signing bonus.

As you strive to enhance your career prospects and achieve new heights of success, consider partnering with Highrise. With over 100+ years of collective coaching experience, Highrise has consistently empowered growth-minded individuals to learn how to negotiate better and level up other important workplace communication skills as well.

Signup today and let Highrise help you pave the way to a brighter future.

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Andrew Langat
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Andrew Langat is an experienced content specialist in Leadership, Productivity, Education, Fintech, and Research. He is an avid reader and loves swimming as a hobby. He believes that quality content should be actionable and helpful.