Which is better? High salary low bonus or low salary high bonus
By scheng1
@scheng1 (24649)
Singapore
November 9, 2010 9:32pm CST
What do you think is better? To have a job with high salary but low bonus and bad fringe benefits or low salary with high bonus and good fringe benefits?
The companies now are trying to pay out lower and lower basic salary, and they try to compensate by giving a higher bonus.
If you have a job with high salary, the risk is that when the times are bad, the company can use 20% salary reduction as cost cutting measures.
If you have a job with low salary and high bonus, then the risk is that the company refuses to give out bonus, since bonus is not a mandatory requirement, and we do not usually have this clause of guaranteed bonus in our appointment letter.
2 people like this
16 responses
@kalav56 (11464)
• India
10 Nov 10
Hullo Scheng! How are you? I t is quite some time since I have seen you here.FOr that matter I am also not too active but even when I was here earlier you had taken a long time off.Just dropped in to say 'Hi'when I saw your topic now.Hope things are fine with you.
1 person likes this
@scheng1 (24649)
• Singapore
10 Nov 10
Hi Kalav, I come on and off to start a discussion or just to take a look around here.
Quite close to the ten dollars mark now. Likely to stay active until I get the payout for this month, then probably hibernate for another few weeks.
How is life with you?
1 person likes this
@neo2001 (5)
• Romania
10 Nov 10
I like high salary and low bonus, just because I can manage my founds better in time.
THe bonuses you don't know when they come.Easter, christmas, maybe after you did something very good, still they are rare and u can't manage your founds after the bonuses.
@scheng1 (24649)
• Singapore
10 Nov 10
Hi Neo, I like high salary and low bonus also.
Many banks do not consider the bonus when approving your credit card application or loan application.
However, a high salary is always a good thing, can get loan easily.
Plus money in our pocket is still better than money in the pocket of our bosses. However, high salary also means that we spend more rather than save more.
Those with low salary tends to spend less, and always wait until fat bonus come, then they buy things.
1 person likes this
@scheng1 (24649)
• Singapore
10 Nov 10
Hi Youless, most people prefer it this way.
In rare occasion when a company pays very high bonus, such as 18 months for the employees of the local stock exchange, the whole country envied them. However, they forgot that those employees worked very long hours at very little pay. The bonus was just one off, and never repeated.
It seemed that many finance companies are giving low salary with higher bonus. But then, when economy is bad, they also retrench a lot of workers, so even low salary does not guarantee job security.
I prefer high salary with low bonus too.
1 person likes this
@strawberrychocodahi (4818)
• Philippines
10 Nov 10
If my skills are worth it, I would go for both high salary with good fringe benefits. But since the selection was high salary with low bonus and the vice versa of it, then I would choose high salary even if the bonus was low.
At least I get to earn a higher pay and bonus will just be an added feature. No company can give bonuses all the time so high salary is better. What good does it make if you have a low paying salary but the bonus will just be once in a while. Not unless the fringe benefits are great like free transportation, 10% pay on housing.
@scheng1 (24649)
• Singapore
10 Nov 10
Hi Strawberry, from the perspective of a company, it either adopts a high salary low bonus and less benefits scheme, or a low salary, more benefits and high bonus scheme.
You do not see a company with high bonus and high basic salary.
Even though you may feel your manager or director gets a very high salary. However, when you compare the basic salary between people of same level, you can still see that it falls into these two categories.
Japanese companies are famous for low salary, high bonus and good fringe benefits.
They provide uniform, still give uniform allowance, transport allowance, meal allowance, perfect attendance incentive, and overtime payment.
The fact is that the low salary keeps many employees in the rank that is eligible for overtime pay.
In the end, with bonus payment, the overall salary is very high.
1 person likes this
@ip5217 (1655)
• Philippines
10 Nov 10
As an employee myself I would like to have high salary because that's a fixed amount I will receive on a monthly basis. Meanwhile, bonuses are performance based. We wouldn't know how much we are to expect every payday.
In the Philippines the only good thing about bonuses is that it's non-taxable. Regardless, I still want to have high salary.
1 person likes this
@scheng1 (24649)
• Singapore
10 Nov 10
Hi Ip, i am surprised to hear that bonus is not taxable!
In this case, I will opt for lower salary and higher bonus. What for we give money to the government! I hate to pay even a single cent as income tax. Over here, we have goods and service tax on practically everything we buy, and we still need pay income tax, property tax, water conservancy tax, and all other nonsense tax.
With lower salary, I would get money for overtime payment.
1 person likes this
@puccagirl (7294)
• Israel
10 Nov 10
It depends on the employee I think, different people are better suited for different arrangements. I would probably go for a low one with high bonuses since I am ambitious and a hard worker, so I think I would earn more that way. But not everyone is like me, so it might not be the best option for everyone!
1 person likes this
@scheng1 (24649)
• Singapore
10 Nov 10
Hi Puccagirl, actually it is more of company culture that decides on the salary package.
As far as I know, Japanese companies are great at giving fringe benefits and good bonus, while keeping a very low basic salary.
The low basic salary enables most employees to stay within the range to earn overtime rate.
In the end, those employees are earning more than other employees in other companies.
Some companies even give a high salary without any benefit. They dont want to waste time administering the benefits, so they include everything in the basic salary.
1 person likes this
@yugasini (12893)
• Secunderabad, India
10 Nov 10
hi scheng,
after long time i am seeing you in mylot and i have not found you in wikinut in these days,what is the reason,or you engaged in some other money earning project,regarding the discussion high salary less bonus and less salary high bonus,salary will be paid monthly,so it should be high and bonus will be given once in year it may be low,it is simple,let me know your present works by pm,if you wish to tell me,have a nice day
@yugasini (12893)
• Secunderabad, India
11 Nov 10
hi scheng,
thanks for the response,but you have not informed me about your present work,i think i may not disturb your work,boss will think like that only,they will invest that money in the business,bonus is giving once in year,but the salary is once in month,he will accumalate the funds and get interest also,the owner is having double benifit,have a nice day
@scheng1 (24649)
• Singapore
11 Nov 10
Hi Yugasini, glad to see you again.
It seems you are enjoying yourself in Mylot very much. You have far more posts than many other people.
Do you manage to get the payout every month?
Where work is concerned, I like a high salary too. Too bad the bosses of the companies do not think this way.
I think paying low salary and giving high bonus is better for the business, since they have more money to invest in business opportunities.
@Canellita (12029)
• United States
7 Dec 10
High salary is always better. You know what you have to work with each month, whereas the bonus is something you have to wait for and can not really count on until you have it.
@scheng1 (24649)
• Singapore
8 Dec 10
Hi Canellita, given a choice, I also go for high salary rather than high bonus. I have seen one company who dares to commit the bonus to the profits.
That means when the company reaches a certain level of pre-tax profit, it will give out a certain months of bonus.
That company has a strong union, and is a listed company. That is why the employees trust the management.
Most companies do not dare to commit the bonus factor in writing. The boss or the Board of Directors has the final say.
@scheng1 (24649)
• Singapore
11 Dec 10
Hi Canellita, if there is no profit, the company will cut salary or retrench some workers.
Over here, the government encourages businesses to pay good bonus when they make money. However, when there is no profit, the government encourages the workers to accept the pay cut, so that the businesses can survive.
It is a fact of life. Most people accept this arrangement, since low salary is still better than no salary.
The last labor strike in Singapore took place in 1986. Since then, not a single labor strike.
When workers face labor dispute, the labor unions will step in to help or the workers can complain to the Ministry of Manpower.
@Canellita (12029)
• United States
8 Dec 10
Are you saying the bonus is given based on the profit and if there is no profit there is no bonus?
@Renhard (3471)
• Jamaica
11 Nov 10
Well to me i prefer to have a high salary and low bonus atleast then if the company decides to cut the salary i would have already save a good amount of money and now i would be in the same category of low salary and would still be getting a small bonus. While small bonus would have it hard to save some money. Think about it.
@scheng1 (24649)
• Singapore
11 Nov 10
Hi Renhard, most people think the same way as you.
I also prefer a high salary with low bonus. However, I observe that those with high salary do not know how to save the money.
They probably save only their bonus, since they have budgeted their finance according to the high salary.
Those who have low salary live according to the earned salary, they dare not spend more than their salary.
When the bonus comes, they do not spend everything too. They are frightened to spend even half the bonus, knowing that next year they might not get the same sum of money as bonus.
Some companies in my country work on the low salary high bonus concept, the bonus is as high as 18 months.
@babyEj (1522)
• Philippines
12 Nov 10
i'd rather have high salary than having a low salary. if you got high paid job this means greener pasture. It's a long term benefit for a worker. on the other hand, bonus is just an incentive for us, employees.
@scheng1 (24649)
• Singapore
12 Nov 10
Hi BabyEj, I also prefer high salary, since salary is fixed term payment.
However, the trend is towards low salary and high bonus in my country, since the government encourages it.
Some unions are smart. They make the companies put into writing that pegs the profit to the bonus.
For example, $100m profit means a certain months of bonus.
I have seen this kind of term in the collective agreement. Once the term is agreed upon, and endorsed by the Labor court, it becomes a guarantee.
I think that is a good scheme. In this case, the workers know that they can get bonus even though their monthly salary is very low.
@chuyins123 (2112)
• Philippines
10 Nov 10
Hi scheng1,
Well, I would rather have a high salary with not much fringe benefits and bonus. Why? Well, salary is an agreed upon fixed rate per month, and it should be regardless of the company's performance, you have to get what is agreed upon. To avoid what you feared as reduction, don't sign a contract that contains any favor to the company to allow them reduce salary at their discretion, sign a contract with a fixed amount of salary notwithstanding the company's financial performance.
Bonus is something really and usually discretionary on the part of the employer. So you don't have any control over it. So you should rather choose a high paying salary with not much bonus instead of the opposite.
@scheng1 (24649)
• Singapore
10 Nov 10
Hi Chuyins, it is hard to find a contract that does not allow salary deduction in Singapore.
Salary freeze or reduction is encouraged by the government as part of cost cutting exercise. The reason is that it is better to have all employees at lower salary than for some employees to lose their jobs.
That is why companies wont put such a clause to guarantee payment of salary irregardless of company's performance.
I would rather have higher basic salary too.
When we change job, the new employer will look at the basic salary and work out a higher basic to offer to us.
If our salary is too low, we cannot ask for higher basic later on.
1 person likes this
@Bannybanzie (1397)
• Philippines
10 Nov 10
Well I think it depends on how much is that high salary and that low bonus and how much is the low salary and high bonus. My job does not give me a much high salary and it does not give me bonuses either. I think if I am to choose between the two, considering my situation, I would go for the high salary plus low bonus. I would just be thrifty and save money at the bank so that I can look forward to something in my future. I can also make investments on other things that may give me profit if I have a high salary and therefore having other source of income. The bonuses I think are never really that high. I mean, at least the salary is something your boss would always have to give you, but the bonus, as you said, is not mandatory. So, if you got high salary, you're sure to get money. But if you would only depend on the bonus, what if your boss does not give you the bonus or gives you not really high bonuses?
If I am to choose, I would go for high salary with low bonus over the opposite. The bad thing is, I don't have this kind of choices. My only choice would be to work and get paid a not so big amount without bonus at all. Good thing for those who got a good paying job. If you guys got a good paying job (though may not be your dream job still), take care of it. Love your job and hopefully, your job will love you too. I am hoping my job will love me too...
@scheng1 (24649)
• Singapore
10 Nov 10
Hi Bannybanzie, that is very sound advice.
I think most of us who had worked for many years would appreciate the wisdom of your advice.
It is hard to have a choice especially in this economy.
We are really grateful when we get a job. A job with a stable income is still better than no job at all.
If we were given a choice, then we can afford to be choosy.
I prefer a higher salary too. Most employers look at your last drawn salary when they offer you a job. They do not care whether you have high bonus or low bonus. In Singapore context, there was a time when the financial sector gave out 18 months bonus.
That is the record, and not repeated.
1 person likes this
@Gkmxxv1 (7)
• United States
12 Nov 10
Well isn't it better just to get the job you actually enjoy, Your Salary Should be a Secondary Objective, but You should alwese want a Job that you like, I mean would you Prefer Getting up to Work at a Horrible and Boring job Just for a Mid-High Salary or a Medium to Low Salary job where you just cant wait to get up in the Morning to go out and Work in your Favorite place to be, not rotting your Life away in a place with no Considerable Memories. I'm not Saying their are jobs out there that aren't high paying and Enjoyable, I'm just trying to get a point out =D
@scheng1 (24649)
• Singapore
12 Nov 10
Hi Gkmxxvl, obviously the job must be the one we like, otherwise we will not even want to apply for the job.
However, when two companies in the same industry offers the same job, with different salary scheme, then the difficulty comes in.
It is like those teachers working in the school. Even though they love teaching, they still have to make a choice between working in the city or countryside. Some teachers even choose to work in a private boarding school.
While the job is still teaching, the location of the school makes a big difference. It will affect the salary too.
Salary is the most important factor when it comes to job offer. You do not know whether you like the working environment or not until you start work. That is why salary is the most important factor.
If the salary is good, many people are even willing to take on a job they hate. They can save money and retire earlier.
@scheng1 (24649)
• Singapore
11 Nov 10
Hi Sjlskl, that is what most of us prefer, unless the work is such that we need to work overtime, and the high salary prices us out of the overtime payment. In that case, I want lower salary, and with good overtime rate.
There are people in certain industries who work very long hours.
They have low salary, lots of overtime, and in the end, the overtime payment is double that of their salary.
At the end of the year, they gain nine or ten months bonus. The highest in record in my country is 18 months bonus.
However, that is an one-off and never repeated.
That is why I also prefer to have high basic salary and low bonus.
@Gkmxxv1 (7)
• United States
12 Nov 10
Well isn't it better just to get the job you actually enjoy, Your Salary Should be a Secondary Objective, but You should alwese want a Job that you like, I mean would you Prefer Getting up to Work at a Horrible and Boring job Just for a Mid-High Salary or a Medium to Low Salary job where you just cant wait to get up in the Morning to go out and Work in your Favorite place to be, not rotting your Life away in a place with no Considerable Memories.
