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  1. #21
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    Quote Originally Posted by amyd View Post
    Given its run by a husband and wife I can only think of 1 way it might be done. If it's structured as a partnership and they take the 5% as drawings and give it to DH then they will still be paying tax on it and it will effectively be a gift. Not sure how the tax man would feel about that.
    If its not completely above board I highly doubt they would do it. They are very by the book in the way they run their businesses. The way Im thinking now is that dh got it wrong and it will be taxed. And/or its not 5% of the direct profit but an amount equal to, but that doesn't really make any difference- its still a 'bonus' and would need to be taxed etc.

    Hurry up dh and come home so I can see the damn paperwork!

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    I'm thinking there has to be a catch somewhere.

    There is a huge difference between an extra $30 per week and $12500 every six months. I can't understand why they would make two different offers that vary so differently in terms of $. I'm naturally pretty cautious and would be concerned they are predicting a downturn in the market.

    Having said that, Option 2 is the obvious choice regardless of any taxation ramifications.

  3. #23
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    Quote Originally Posted by SSecret Squirrel View Post
    I'm thinking there has to be a catch somewhere.

    There is a huge difference between an extra $30 per week and $12500 every six months. I can't understand why they would make two different offers that vary so differently in terms of $. I'm naturally pretty cautious and would be concerned they are predicting a downturn in the market.

    Having said that, Option 2 is the obvious choice regardless of any taxation ramifications.
    It's done this way to encourage performance. It's not uncommon.

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    Quote Originally Posted by Sonja View Post
    It's done this way to encourage performance. It's not uncommon.
    This.

    Also some people prefer one bird in their hand rather than two in the bush. IYKWIM

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    ETA being that it is a % of profits (however profit is defined) it's not dodgy. They obviously can't predict their profits so have given the OP's husband a ball park based on past performance.
    @SheWarrior with my DH's arrangement he always focuses on his monthly wage and any bonus is just that, a bonus. We never count on it, rely on it or expect it. If the base salary is sufficient for your needs go for the bonus. If not, maybe he should focus on negotiations for a better base salary.

    That's what I'd do.

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  7. #26
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    Quote Originally Posted by SSecret Squirrel View Post
    I'm thinking there has to be a catch somewhere.

    There is a huge difference between an extra $30 per week and $12500 every six months. I can't understand why they would make two different offers that vary so differently in terms of $. I'm naturally pretty cautious and would be concerned they are predicting a downturn in the market.

    Having said that, Option 2 is the obvious choice regardless of any taxation ramifications.
    Exactly that- there is no guarantee he would receive anything. The amount was just an example. One good thing about dh's job is there will always be a demand for it- even during down turns which we are experiencing now.

  8. #27
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    Quote Originally Posted by Sonja View Post
    ETA being that it is a % of profits (however profit is defined) it's not dodgy. They obviously can't predict their profits so have given the OP's husband a ball park based on past performance.
    @SheWarrior with my DH's arrangement he always focuses on his monthly wage and any bonus is just that, a bonus. We never count on it, rely on it or expect it. If the base salary is sufficient for your needs go for the bonus. If not, maybe he should focus on negotiations for a better base salary.

    That's what I'd do.
    Yes! This is what i was trying to say haha. And yes, its not something we should/would count on or expect. If he does go that option I dare say most if not all of any bonus he gets will go into the house deposit account. We have survived this long without it so it wouldn't exactly be missed, if that makes sense.

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    Default Wdyt

    Oh I would be careful with option 2......there are many ways a company can influence profit. For example the owners may have a massive year and decide to increase their own salaries significantly which then reduces profit that your dh's bonus will be calculated on. There are a lot of costs that go through a business that will not be influenced by the hard work your DH does and I have previously worked in a business that had a similar structure that made little "profit" but paid many expenses through the business for various family members who were "employees" so this then dilutes commissions/ bonuses that are paid to sales people. Ultimately you have more potential to earn greater money through option 2 than option 1 but I would only go for option 2 if you don't need the extra $30 a week......... Good luck in deciding.

  10. #29
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    Sure profits can be manipulated but it wouldn't be a smart idea to do so to avoid paying bonus to your employees.

    Unless you'd want your employees to quit.

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    Quote Originally Posted by ExcuseMyFrench View Post
    Sure profits can be manipulated but it wouldn't be a smart idea to do so to avoid paying bonus to your employees.

    Unless you'd want your employees to quit.
    how would they ever know?

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