Returning a clawback bonus
Assuming someone wants to leave before the clawback period expires. Is the amount they return pro-rated and do they return the pre-tax or post-tax amount? T&C is unclear on this.
Generally, you have to stay for a year at most places or else you have to repay your signing bonus.
He’s asking do you return the pre-tax or post-tax amount.
Never heard of clawback bonuses outside of finance. Usually you get a document that clearly spells out these situations, but if not I would think the answer is yes and yes.
Unclear what the second yes corresponds to? Pre-tax or post-tax?
Post tax. Your W2 should look like it never happened
Been there, left 9 months in. Had to return full pre-tax amount by writing the company a check. They gave me a receipt to use to try to get the taxes back on it, but I’m not convinced I ever did.
I think it’s posttax. It doesn’t make sense to pay pretax
You should have gotten a w2c to show the adjustment since the company has a legal requirement to explain where your cheque came from
Pretax. They let you deal with the IRS.
Lovely.
Yeah. If you get it and leave within the same tax year then its pre tax. But if you got a bonus in like September and leave in June, its post tax because they already paid it out. I had to give one back once.
Posttax.
That bad, huh?
Usually: - If you paid back in the same calendar year you pay net and employer grosses it up and adjust their tax withholding. - if you pay it back next year, you pay gross but get tax credit
This contradicts what jei (MailChimp) wrote above though right? They suggest that if you’re leaving in a different year you only pay the post-tax part.
Pre-tax. I know this from experience.
What on earth is a “clawback bonus”?!?! Tell me it is not exactly what it says!
It’s sign on cash bonus with repayment agreement. The payment is earned if you stick for the clawback period.
What on earth is a “clawback period”?!