Awaiting a windfall
Congrats! You’ve made it far enough in the interview process that your next nurse practitioner job is in sight. Maybe you’re dreaming of landing your first NP position. Or, perhaps you’ve got visions of a more balanced career-home life ahead with this next step. Whatever your motivation, the final part of the NP job interview process means negotiating compensation.
Signing bonuses are popular among employers. They are a short-term, one-time expense and serve as a financial nudge for a NP to accept a position. For nurse practitioners, the promise of a few thousand dollars in the bank makes a job proposition seem all the more attractive. But, a signing bonus can quickly become a pair of handcuffs, tying you financially to a job. As you negotiate your employment agreement, ask the following questions before you start to swoon over the bump in your bank account.
1. What are the terms?
Typically, nurse practitioner employment contracts stipulate that you must repay all or part of a sign-on bonus if you leave the company before a certain date. Most likely, this date is 6 months to one year from your start date. Make sure the time commitment tied to your signing bonus seems reasonable so you don’t find yourself scrambling for cash to repay the sum.
2. When will I get paid?
Before you mentally cash your bonus check and plan to celebrate your new nurse practitioner job, pay close attention to the way your sign-on bonus will be paid. Some companies pay out the full bonus amount upon signing an employment agreement while other companies pay out the signing bonus slowly, with payments divided into monthly or quarterly installments. Yet other companies only start paying out the bonus once you’ve been at the company for a specific duration of time. Read the ine print and negotiate the terms of payment if you’re strapped for cash.
Since a sign-on bonus is a one time payment, negotiating this perk may not be your most favorable option in terms of earnings. Keep in mind that a $100K salary is not the same as a $90K salary plus a $10K sign-on bonus. If you’re offered a 5% raise in the coming year, for example, your raise will be calculated on your base salary, not your salary plus bonus. Other benefits calculated based on salary, such as retirement plan contributions, will also be determined by your base salary. Long-term, negotiating a higher base is usually better than a lower base plus a signing bonus. Do some number crunching before you jump on the opportunity for an initial bonus.
4. How much will I owe in taxes?
I hate to be the bearer of bad news, but you’re going to need to pay taxes on your nurse practitioner signing bonus. Whatever your tax rate is, you’l need to fork over the equivalent of this rate for your bonus as well. Set aside the funds you’ll need to pay Uncle Sam or ask your employer to deduct them from your check.
5. Is the bonus a sign of desperation?
While I don’t often see this among the nurse practitioners I talk with, it does happen. A flush signing bonus can be a sign that a company is desperate for providers. Eagerness to fill gaps in the schedule doesn’t necessarily mean that a company isn’t a good place to work, but it can. If you’ve gotten a vibe of desperation from a prospective employer, do your homework and uncover the reason before you sell yourself short for the lure of a bonus.
Were you offered a nurse practitioner signing bonus? What were the terms?
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