RE: Bonus instead of raise -- why?

Subject: RE: Bonus instead of raise -- why?
From: Matthew Horn <mhorn -at- macromedia -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Mon, 1 Oct 2001 16:06:48 -0400

You can bet the bean-counters factored this (not paying FICA, comp, etc)
into the decision. I would also add that many times bonuses don't qualify
for application towards your 401k, so the employer does not have to make
matching contributions, either.


>>-----Original Message-----
>>From: dthomps -at- foundationsoft -dot- com [mailto:dthomps -at- foundationsoft -dot- com]
>>Sent: Monday, October 01, 2001 4:01 PM
>>Subject: RE: Bonus instead of raise -- why?
>>Other respondents have raised very valid points about
>>"compounding" your
>>raise. But I would also like to raise another, stickier, issue.
>>I'm not entirely sure if it's legal or not, but I used to
>>work for a company
>>which paid bonuses in a big amount and did not withhold
>>taxes on them. I'm
>>not entirely sure of all the technicalities, but I believe
>>because they did
>>not withhold the taxes, and because it was a "bonus" they
>>saved a lot of
>>money on taxes on their end (Workers' Comp rates, employer
>>share of FICA,
>>etc.). In the end, I had to pay all of my share of taxes
>>on those bonuses
>>at the end of the year. If you don't plan ahead for that,
>>it can be a big
>>problem! Make sure, too, that you won't be stuck paying the
>>employer share.


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