Wage restructure

Mcfoodface

I recently got my salary restructured and I don't fully understand what it means.

I was earning €XX,000 base plus 20% quarterly bonus. Now my base has gone up, but my bonus has been reduced to 10%. Overall, my total salary is the same.

Does this mean I am going to pay less tax and my monthly wage will be more after tax?

Why would a company do this? If I am going to be paying less tax in future with the new restructure, I am wondering why my company didn't do this 3 years ago!

ellobee

If your total salary is the same then your total tax will be the same, you have to pay tax on all your income including bonuses, it means your tax will be spread out over the year instead of you getting a big hit for tax every 3 months. If it was me personally I would prefer the increased base salary. if things are not going well in the company its a lot easier to reduce or even abolish bonuses or make them performance related. Its much more difficult to reduce a persons base salary.

mcgovern

Increased base salary will also mean your overtime rate will go up (if you get paid overtime) and pension contributions (if your company provides them at % of your income) will go up.