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A $5,000 raise compounds to $27,608 over 5 years — beating a $15,000 bonus by $12,608. The raise wins from year 3; take the bonus only if you are leaving early.
Employers offer signing bonuses because one-time cash closes candidates without raising the comp band — and candidates accept because $15,000 today feels bigger than $5,000 a year. It is not. The raise compounds: at 3% growth plus a 4% 401(k) match riding the base, $5,000/year is $27,608 over five years — beating the bonus by $12,608, with breakeven in year 3. And base propagates: future raises, annual bonus percentages, match, life insurance multiples, and severance formulas all scale off salary. The bonus wins in exactly two cases: you are leaving before breakeven, or you have 20% APR debt to kill. This calculator prices the trade with your tenure horizon.
Candidates use it before accepting the "generous" bonus: a $5,000 raise compounds to $27,608 over 5 years — beating a $15,000 bonus by $12,608 — because raises are seeds and bonuses are flowers.
Because the bonus is cheap for them in every way that matters and expensive for you in the same ways. One-time cash does not raise the salary band — next year's raise percentage applies to the un-bonused base, the comp ratio stays clean for HR, and internal equity is undisturbed. The bonus also terminates: the raise pays forever, the bonus pays once. And the clawback turns it into a retention tool: repay-if-you-leave-in-12-to-24-months terms handcuff you through the exact window when a raise would have been recruiting-proof. Read clawback terms before signing anything: you want monthly proration (leave at month 18 of 24, repay 25%), death of the clawback if THEY terminate or lay you off, and clarity on whether repayment is gross or net of the taxes you already paid on it (gross repayment after paying 30% tax is a real and nasty surprise). The tell that the bonus is substituting for a band problem: "we can't move base but we can do a signing bonus" — translate it as "the band exists and next year's raise will be 3% of the lower number."
Three clean cases. Short tenure by design: you know this is a 12–18 month stop (relocation coming, industry bridge role, startup with an expiration date) — before breakeven the bonus is genuinely more money, so take the cash and mind the clawback window. Debt arbitrage: $15,000 against 20%+ APR credit card debt returns more than any compounding base — the math of killing toxic debt beats the math of salary growth, and the stress reduction is free. And when the base is capped: if the role sits at the top of its band and the raise literally cannot happen, the bonus is not a trade — it is extra; negotiate the SIZE. The move that beats both: ask for both. "I understand the band constraint — can we do $8,000 signing and a written 6-month review with a path to $X?" splits the employer's cash-flow objection while preserving your base trajectory. Whatever you take, one tax note: bonuses hit 22% supplemental withholding, which is NOT your tax rate — you settle to your actual bracket at filing, so a refund difference is normal.
Yes — and the propagation is the reason this calculator weights the raise so heavily. The base multiplies through: percentage raises (3% of $100k is $3,000; of $105k, $3,150 — the gap grows every year), annual bonus targets (a 10% bonus target pays 10% of BASE — the bonus-on-bonus effect), 401(k) match (a 4% match on the higher base is $200/yr of free money compounding at market rates), group life insurance (typically 1–2× salary), long-term disability (60–70% of base), severance formulas (weeks per year of service, of base), and — the quiet one — your NEXT job's offer, which anchors on current base wherever salary history is legal to ask or volunteered. Ten years of 3% raises on a $5,000 base gap is $114,639 of cumulative difference — the number this calculator shows. The only propagation the bonus touches: nothing. It is a flower, not a seed. When evaluating ANY compensation trade — bonus vs base, equity vs base, title vs base — ask which side compounds and which side evaporates. Take the seed every time you plan to stay.