Salary Increase or Bonus?

Doop

Just a thought.. I've been advised of a bonus I will be getting this year, my boss was flexible as to how this was paid ie once off or over a couple of months. I guess my question is would it be preferable to have a salary increase of the equivalent amount or does it not make a difference?

Tax is the only possible implication I guess. I am also looking to go for a mortgage so think the higher the salary the better...

steamsey

Zero difference from a tax perspective. Main practical difference is timing for you - get it each month or once a year.

From a mortgage perspective, what they ask is what is guaranteed salary and what is guaranteed bonus. If your bonus is not guaranteed, your employer will tick such on the salary cert you need for the mortgage so will reduce the amount of a loan you can get.

Akrasia

i'd go for salary increase tbh, because if you're negotiating a raise or a new salary following a promotion in a year or two, it'll be based on your current salary so if you get a 5% raise for example, it's 5% of a higher number

amcalester

For a mortgage take the higher salary.

If you're paying into a pension and your employer matches then it'll be better for you too.

Greentree_uk

go for salary increase always if its on the table. bonus's don't always get paid, but your salary is.

sbsquarepants

Always take the salary if it's for anything like a similar amount - there's any number of reasons you might never see that bonus!

Doop

Thanks guys, few points there I hadn't though of alright. MD is happy to 'guarantee' the bonus on salary cert etc for mortgage. But I may go back and request to get it as a salary increase based on the above points

LincolnHawk

No such thing as a guaranteed bonus. Choose base salary over bonus every time