MOGuy424
Well-Known Member
Could we start a thread addressing this ridiculousness of the Signing/retention bonuses? While I do not have all the facts and am still 100% unclear how these work or why they are better then upping first year pay, it seems like a scam to me.
From what I know, and believe me, I appear to know than what you might think I do not know that I know =o). But these signing and retention bonuses seem like:
1) They are company instituted and not blessed by the union, so my understanding is that these can go just as easily as they came. Why are the unions not fighting the company on these and demanding better first year pay and contracts?
2) My other understanding (or misunderstanding) are that these bonuses can be subject to almost as much at 40% tax rates, thus a 20k bonus works out closer to 11k (turd sandwich)
I pulled this from the IRS Q&A site so this along with others just telling me that they are highly taxed is the source of my understanding:
"The IRS has rules for withholding on "supplemental wages" - which includes bonus payments - that differ from their withholding rules on regular wages. Assuming that your bonus was less than $1 million, the employer has a choice of withholding a flat 25%, or combining the bonus with the regular wages, computing the withholding as though that were a single payment, subtracting out what would have been withheld from the regular wages, and withholding the remaining amount from the bonus payment. The method chosen depends on the employer's payroll system but will typically be higher than your normal withholding rate. The employer will also withhold Social Security and Medicare (combined rate of 7.65%) and state taxes, which is probably what pushes the total withholding close to 50%".
If anyone with knowledge can chime in I'd appreciate it. And if this is truth then new FO's really need to see the bonuses for what they are, turd sandwiches.
Cheers!
From what I know, and believe me, I appear to know than what you might think I do not know that I know =o). But these signing and retention bonuses seem like:
1) They are company instituted and not blessed by the union, so my understanding is that these can go just as easily as they came. Why are the unions not fighting the company on these and demanding better first year pay and contracts?
2) My other understanding (or misunderstanding) are that these bonuses can be subject to almost as much at 40% tax rates, thus a 20k bonus works out closer to 11k (turd sandwich)
I pulled this from the IRS Q&A site so this along with others just telling me that they are highly taxed is the source of my understanding:
"The IRS has rules for withholding on "supplemental wages" - which includes bonus payments - that differ from their withholding rules on regular wages. Assuming that your bonus was less than $1 million, the employer has a choice of withholding a flat 25%, or combining the bonus with the regular wages, computing the withholding as though that were a single payment, subtracting out what would have been withheld from the regular wages, and withholding the remaining amount from the bonus payment. The method chosen depends on the employer's payroll system but will typically be higher than your normal withholding rate. The employer will also withhold Social Security and Medicare (combined rate of 7.65%) and state taxes, which is probably what pushes the total withholding close to 50%".
If anyone with knowledge can chime in I'd appreciate it. And if this is truth then new FO's really need to see the bonuses for what they are, turd sandwiches.
Cheers!
