You will be able to read the bonus wording in an offer and say how much of it is guaranteed.
Hui Min is holding the two offers from lesson 1.1. The S$4,200 job comes with a line she keeps rereading: "You will be eligible for a performance bonus of up to three months' salary." Three months of S$4,200 is S$12,600. Her friend told her to add that to the salary and call it a day. If she did, the bigger offer would win easily.
That sentence is worth reading slowly, because it promises much less than it seems to. This lesson shows you how to read bonus wording, what to ask about it, and what number to put in your comparison. Every figure in it is a made-up example.
Bonus clauses are written by people who choose their words with care. A few phrases come up again and again, and each one tells you the bonus is not guaranteed.
"Discretionary" means the company decides whether to pay it and how much, and it does not have to explain. "Up to" sets a ceiling and says nothing about a floor. "Subject to performance" or "subject to company and individual performance" means two things have to go well, and only one of them is in your hands. "Eligible for" means you are allowed to be considered, which is a long way from being paid.
Put any of those words in front of a figure and the honest reading is: somewhere between zero and that figure. Hui Min's clause has three of them in one sentence.
Compare that with wording such as "a fixed bonus of one month's salary, payable in December". That is a contract term. If the company does not pay it, you have something to point to. The annual wage supplement from lesson 1.1 works the same way: it counts as guaranteed only when your contract states it.
A clause tells you the ceiling. Past payouts tell you what people really got. So ask the recruiter or hiring manager two plain questions: how was the bonus paid over the last two or three years, and what decides it?
The second question matters as much as the first. Some companies pay mainly on company results, some on your own rating, some on a formula that mixes both. If the bonus depends on company profit, a bad year hits everyone. If it depends on your rating, ask how ratings are spread, and whether a new joiner who starts mid-year is paid in full, pro-rated or not at all in the first cycle.
Most employers will give you a rough answer. If nobody will say anything at all about past bonuses, that is information too, and your estimate should be low.
Hui Min asks. The recruiter tells her the team received 1.5 months, then 1 month, then nothing last year when the company missed its targets. For the S$4,000 offer, which says "up to one month", she is told the last two payouts were half a month each.
Some offers include a sign-on bonus, a lump sum paid when you join or after your first month. It is real cash, but it often comes with a clawback: a clause that makes you repay some or all of it if you leave within a set period.
Read three things in that clause. How long is the period? Do you repay the whole amount or a share that shrinks the longer you stay? And does it still apply if the company is the one that ends the job? Say an offer pays a S$3,000 sign-on bonus that must be repaid in full if you resign within 12 months. Until that year is up, the S$3,000 is closer to a loan than a gift. If there is a real chance you would leave early, value it at less than its face amount.
Now you need one figure for each bonus. The rule is simple: value a variable bonus at a cautious estimate, never at its maximum.
A workable method is to average what was actually paid over the last few years, using the figures you were given, and treat the result as possible cash rather than guaranteed cash. For the S$4,200 job, the last three payouts were 1.5, 1 and 0 months, which averages 2.5 divided by 3, about 0.83 of a month. At S$4,200 a month that is S$3,500 a year. For the S$4,000 job, half a month is S$2,000.
So Hui Min's comparison carries S$3,500 and S$2,000 as possible bonus, not S$12,600 and S$4,000. The gap she thought was huge is S$1,500, and neither number is promised. If you could not get any history, use zero as your cautious figure and write the maximum next to it as a note. A pleasant surprise is easier to live with than a budget built on money that never came.
Keep guaranteed and possible pay in separate subtotals when you build your sheet in lesson 1.4, Build a total compensation sheet for two offers. That way you can see how much of each offer rests on things outside your control.
Take the bonus clause from your own offer, or from Hui Min's, and read it once more with the three questions in mind: what is certain, what is only possible, and what you might have to give back.
Rewrite the bonus clause of an offer in one plain sentence stating the guaranteed amount, the possible amount and any clawback.
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