Bonuses/13th check annually or split monthly?

[IziWhatNow]

Bonuses/13th cheque annually or split monthly?

Hi guys,

The company I work for has given me a 13th cheque each December, consistently for the past 4 years. Except one year when it was 110% of my monthly salary.

They like to call it bonuses, and not 13th cheque. I guess its because they want to reserve the right to not give bonuses when the going gets tough.

My question is, are these bonuses seen as part of your annual CTC package? If so, would it make any difference to my employer if I'd ask them to rather split the bonus into the year's 12 months and add it to my normal salary?

My bonus goes straight into our bond every year. I'd save quite a bit on interest if I can just deposit that money bit by bit each month into my bond. I am strict with these things and set up automatic payments as soon as the money lands, so there isn't a risk of splurging with the money.

Any suggestions?

 

[cguy]

Your employer also has an advantage if you leave mid-year or near the end of the year - that money won't be paid out. As you say, they also have the advantage of deciding not to pay it out if finances are tight - you're taking this option from them. Also, things like paid-time-off that you may be entitled to when you leave the company, is likely paid out at your base salary rate.

The amount that you're likely to save is in the order of 10% of 10%. This is roughly equivalent to a 1% raise. If you're willing to go to your employer and ask for different treatment, for them to hear your case, and do you a favour, you would probably be better served just asking for a raise (of more than 1%). It's also more likely to get approved, since the scheme you mention sets a precedent they likely wouldn't want to set.

 

[rpm]

We were given a choice to my previous employer to get it at the end of the year, in your birthday month, or as part of your monthly salary.

It will not hurt to ask your employer if you can can get it as monthly payment, but make it clear that you do not expect it, and if it is a bonus, that you understand that a monthly payment is not possible.

Maybe your company tries to use it as an incentive, which may chance their view on paying it monthly.

 

[Hamster]

If you are disciplined enough to save that money and not use it then it is always (well almost) better to receive it monthly.

 

[SauRoNZA]

If it's not a guaranteed 13th cheque then it's not part of your CTC and not much you can do about it. This should be obvious from looking at your contract.

Does it show on your payslip as a monthly contribution and get taxed accordingly? Then it is guaranteed and they are keeping your own money back.

If it's only annually and that's the only time you see any mention of it, then it's just that...a bonus.

 

[IziWhatNow]

I would.... if your salary is R30000pm and you get the bonus eq to your salary. You'll get R30000, right?

Put it in a separate bank account attracting say 6%+ interest a year (@R150pm) and pay that back to your salaried account. Have you done that for the past 4 years, you would've had an extra R600pm already AND R120,000 in the other bank account.

Great idea, however, if you have a mortgage like I do (at say ~11% interest), saving in there makes much more sense.

 

[IziWhatNow]

Thanks for all the advise guys. I've looked at my contract again and the bonus I receive is not part of my CTC. Therefore I don't feel like I can expect my employer to divide the year's bonus into the 12 months of the year.

 

[HavocXphere]

If you've got your budgeting under control & are self disciplined then it shouldn't matter either way.

I prefer the lump some approach though. Makes it easier to save/invest it....if its split monthly then it just disappears into general household expenses.