Been offered a job - unclear of bonus terms - any advice?

[CrystalDeCanter]

Hi there

I've been offered a job which pays a basic salary which is less that I currently earn.

It does however have a substantial bonus element to the salary, I have been given the offer with this wording - I'm being a bit thick so can someone explain it to me . . .?

In addition to the salary of $XX there will be a Bonus/Incentive Structure paid after the end of 2014 financial year. The threshold for the bonus payment (ie the level of net income above which bonus is payable) is set at $YY, Note this is after deduction of all costs - internal and external (excluding your salary). A bonus will be paid equal to 50% of all net income above the threshold. This applies to all work delivered and invoiced from 1/7/13 to 30/6/14.

How does this sound to you? They have given a gross income budget and the figures they suggest look promising - but its a risk innit?

WWYD? Any questions I should be asking?

Thanks

[flowery]

I would want to know what "all costs" includes...

[CrystalDeCanter]

Yes, that's a bit worrying. It could mean anything . . . I'll check.

[LIZS]

Is the threshold a company based one , your personal earnings or both ? What is the target figure net of ?

[CrystalDeCanter]

Lizs, qood q's will talk to them today to clarify - also I need to get them to up the basic as it's not enough to support everything - mortgage, bills etc.

Feeling a bit conflicted about it all - great job - just up my street etc but a big risk for family finances if the bonus doesn't arrive.

[TheDoctrineOfPositivityYes]

Remember you won't get the bonus until July 2014 - can you manage day to day until then?

[OnIlkelyMoorBahtat]

Hmm! So is this saying that from the income you generate, they deduct "costs" (except your salary), and if what's left is over £YY, you get a bonus equivalent to the 50% of this sum?

For starters ask them to clarify what these "costs" represent. I've never heard of "costs" being deducted from someone's bonus - this almost sounds like they are deducting the cost of employing you from your bonus?

I could understand if they had merely said "your bonus will be 50% of your net income over £YY", because that would be basically mean 50% of the profits you generate, as opposed to the revenues you generate, but then that would include your salary in the gross, as this, surely, also represents a cost...