Organizations may choose to offer and advertise a sign-on bonus to recruit qualified employees to fill open positions. The amounts offered for sign-on bonuses vary based on the position being recruited for and the need to fill the position. Sign-on bonuses often come with a required amount of service in return for the bonus, with the bonus needing to be repaid if the employee terminates their employment prior to the agreed upon timeframe. An employer may also choose to offer a sign-on bonus to be awarded upon completion of pre-determined amount of time with the organization.
A sign-on bonus not only increases the appeal of an open position, but it can also be used as an avenue for advertising open positions.
When reviewing employee bounses, it is important to also take into account the taxes associated with bonuses. Turbo Tax provides a simple yet detailed guide to how the IRS treats bonuses.
The video below provides a unique perspective regarding sign-on bonuses from a nurse’s point of view.