How to negotiate a sign-on bonus, relocation package and other non-salary terms

When a recruiter tells you the salary is maxed out, the money conversation isn't over. A sign-on bonus, relocation package, start date, paid time off and title are often easier for a company to move, and this guide shows you how to ask for each. It also covers how the IRS treats bonuses and moving payments in 2026, and what a repayment clause can cost you before you sign it.

Quick reference: non-salary terms at a glance

When to negotiate terms other than salary

Pivot to non-salary terms when the base really is fixed, not just when the first answer is no. Signs that it's fixed: the job posting lists a narrow range and you're already at the top, the recruiter mentions "internal equity" with people at your level, or the role sits on a published scale (government, union, many hospitals and universities).

Companies often have more room on one-time costs. Base salary repeats every year and future percentage raises build on it; a sign-on bonus or relocation payment is paid once and may come from a different budget.

That's also why you should ask for base first. A one-time bonus isn't a like-for-like swap for a higher salary, because the salary gap repeats every year. If base can't move, use non-salary terms to cover specific, real costs of taking the job.

A sequence that keeps things simple: ask for the base you want with your reason; if it's capped, ask what else is flexible; then pick one or two terms, attach a number and a reason to each, and make one bundled request.

Sign-on bonuses: how to ask and how they are paid

The strongest sign-on requests are tied to money you lose by moving. Good anchors include:

• An annual bonus at your current job that you'll forfeit by leaving before the payout date.
• Unvested stock or a retention award you'll walk away from.
• The gap between the offer and your target base, at least for the first year.
• One-time costs of the switch, such as a break in coverage or overlapping rent.

Bring a number and the math behind it. A specific forfeited bonus is much easier for a hiring manager to take to finance than "Can you do better?"

How the bonus gets paid

Ask two practical questions before you accept.

• When is it paid? First paycheck, 30 days in, or split into installments. Companies sometimes split the bonus to reduce their risk if you leave early. Asking for it up front is reasonable, especially if it replaces money you're losing now.
• Which tax year does it land in? IRS Publication 525 says a bonus your employer only promises to pay later isn't taxable until you receive it or it's made available to you. If you start late in the year, asking for payment in January can move that income into the next tax year.

Get the amount, the payment date and every repayment condition in the written offer or a separate bonus agreement. A verbal promise from a recruiter isn't enough.

How bonuses are withheld and taxed

First, the thing that confuses almost everyone: withholding is not the same as your tax bill. Your sign-on bonus is ordinary income, taxed at your normal rates along with the rest of your income when you file. Withholding is just a prepayment.

Federal income tax withholding

IRS Publication 15 (2026) classes bonuses as "supplemental wages," alongside commissions, severance, awards and payments for nondeductible moving expenses. How your employer withholds depends on how the bonus is paid:

• Paid with your regular wages and not separately identified: the total is treated as one regular paycheck. The payroll formula can treat that unusually large check as if it reflected your yearly pay rate, so withholding can look high.
• Identified separately, and the employer withheld income tax from your regular wages this year or last year: the employer can either withhold a flat 22%, or add the bonus to a regular paycheck, figure the tax on the total, and subtract what was already withheld (Pub. 15 calls this method 1b; payroll staff often call it the aggregate method).
• No income tax withheld from your regular wages this year or last: the employer must use the aggregate method.
• Supplemental wages above $1 million in a calendar year: the excess must be withheld at 37%, whatever your Form W-4 says.

Pub. 15 notes the 22% and 37% rates stayed the same for 2026 because P.L. 119-21, the One Big Beautiful Bill Act, permanently extended the individual tax rates.

Social Security, Medicare and state tax

Whatever withholding method is used, bonuses are also subject to Social Security and Medicare taxes. For 2026, Pub. 15 sets the employee Social Security rate at 6.2% on wages up to $184,500 and Medicare at 1.45% with no cap. Employers must also withhold an extra 0.9% Additional Medicare Tax on your wages above $200,000 in a calendar year.

State income tax applies too in most states, and states set their own rules for withholding on bonuses. Check your state revenue department's withholding guide.

Worked example (hypothetical)

Say you receive a $10,000 sign-on bonus, paid as a separate check, and you're under the Social Security wage base. If your employer uses the flat method:

State tax comes off on top. If your actual federal rate on that income is above 22%, you may owe more when you file; if it's lower, the difference comes back in your refund. If a large bonus throws your withholding off, the IRS Tax Withholding Estimator and a new Form W-4 let you adjust your regular paychecks for the rest of the year.

If you need a specific amount in hand, for example to cover a deposit on a new apartment, ask for the bonus to be "grossed up" so the after-withholding amount hits your target. Say exactly what you need it to cover.

Repayment and clawback clauses

Most sign-on bonuses and many relocation packages come with a "stay-or-pay" condition: leave before a set date and you owe some or all of the money back. Read this clause as carefully as the bonus amount.

What to check

• The trigger. Does repayment apply only if you resign, or also if you're laid off or fired without cause? Being laid off and then billed for your bonus is the scenario to avoid.
• Proration. Is the amount you owe reduced month by month, or is it all-or-nothing until the last day?
• Gross or net. Many agreements ask for the gross amount back, even though taxes were withheld and you only received the net amount.
• How and when. Can the company deduct it from your final paycheck? State wage laws limit what employers can take from wages, so this varies.
• Interest, fees and deadlines. Look for interest charges or a short payment window.

What to ask for

You can usually negotiate the clause even when you can't negotiate the amount. Reasonable requests:

• Monthly proration over the retention period.
• Repayment only if you resign voluntarily or are terminated for cause.
• Repayment of the net amount you received, not the gross.
• A shorter retention period.
• No repayment if your role, pay or location is materially changed.

State laws are changing fast

There is no federal ban on stay-or-pay clauses. The Federal Trade Commission's 2024 rule, which would have reached some training repayment provisions, was blocked in court, and the FTC withdrew its appeals in September 2025, according to a March 2026 WilmerHale client alert. States are filling the gap, and the details matter:

• California (AB 692, effective January 1, 2026): broadly bans contract terms that make workers repay a debt when they leave. Repayment of a sign-on bonus or relocation benefit paid at the start of employment is still allowed, but only if it's in a separate agreement, you're told you can consult a lawyer and get at least five business days to review it, the amount is prorated over no more than two years with no interest, you can choose to defer the payment to the end of the retention period, and repayment applies only if you leave by choice or are fired for misconduct.
• New York (Trapped at Work Act): signed December 19, 2025 and amended February 13, 2026. As amended, it generally still allows bonus and relocation repayment, except when the employee was terminated for a reason other than misconduct or the job was misrepresented. Most practitioners expect it to take effect December 19, 2026, though some read the date as February 2027.
• Connecticut (expanded law, effective October 1, 2026): covers all employers, not just larger ones, and makes repayment obligations tied to leaving before a stated period void, including for sign-on bonuses. Loans and advances are among the exceptions, according to CBIA's summary.
• Colorado and other states also have rules on these arrangements.

These laws have exceptions, effective dates and definitions that a summary can't fully capture. If you're asked to repay money, or you're about to sign an agreement with a long clawback, check your state labor department's guidance or talk to an employment lawyer before you pay or sign.

The tax side of paying it back

Repaying a bonus doesn't automatically undo the tax. If you repay in the same calendar year you received the money, ask payroll how they'll correct your W-2.

If you repay in a later year, IRS Publication 525 (2025) explains the rules. Repayments of wages over $3,000 that you reported under a "claim of right" can be taken as an itemized deduction, or you can claim a credit instead, whichever gives the lower tax. If the repayment is $3,000 or less, you can't deduct it. For the Social Security and Medicare tax on prior-year wages you repaid, ask your employer to refund the excess; if it refuses, you can file a refund claim on Form 843. This is another reason to push for repaying the net amount, and a good moment to talk to a tax professional.

Relocation packages and their tax treatment

Relocation help usually comes as a lump sum you spend as you like, reimbursement of receipts up to a cap, or a managed move where the company books and pays the movers. Add-ons can include temporary housing, a house-hunting trip, lease-break fees and help selling a home.

How relocation is taxed in 2026

For most people, relocation money is now taxable wages. IRS Publication 15-B (2026) explains that P.L. 119-21 (the One Big Beautiful Bill Act) made it permanent that employer-paid moving costs count as income for employees. Tax-free treatment remains only for:

• Active-duty members of the Armed Forces who move because of a permanent change of station under military orders.
• Employees and new appointees of the intelligence community who move because a change in assignment requires it. The IRS Topic 455 page says this applies to moves in 2026 or later.

The same groups are the only ones who can deduct unreimbursed moving costs. Everyone else can't write off a job move on their return.

It doesn't matter whether the money goes to you or straight to the moving company. Pub. 15-B says any fringe benefit is taxable unless the law specifically excludes it, and Pub. 15 lists payments for nondeductible moving expenses as supplemental wages. So the bonus withholding rules above apply to relocation too.

Sizing your relocation ask

A relocation request backed by quotes is hard to argue with. Build a simple list:

• Two or three mover quotes, or a truck rental plus fuel and lodging.
• Travel for your household and temporary housing until your new place is ready.
• Lease-break fees, overlapping rent, new deposits, car shipping and storage.

Then ask whether the package is grossed up. If it isn't, part of what you receive goes to withholding, so a package that exactly matches your costs will leave you short.

Ask, too, whether a repayment clause applies; California and New York rules specifically cover relocation benefits.

PTO, start date and title

Paid time off

Under federal law, paid vacation isn't required. The U.S. Department of Labor says the Fair Labor Standards Act doesn't require pay for time not worked, so vacation is a matter of agreement between you and your employer. Some states and cities do require paid sick leave, so check local rules too.

At large employers PTO is often set by policy, but you can still ask for:

• Matching what you have now, or the accrual tier for someone with your experience.
• Time off for a trip you've already booked, written into the offer.
• PTO available on day one rather than after a waiting period.

Also ask whether unused PTO is paid out when you leave. That depends on company policy and, in some states, on state law.

Start date

A later start can be worth real money: it might let you collect an annual bonus or vest stock at your current job, or take a break between roles. When you push the date, ask when health coverage begins so you don't end up with a gap.

Title and level

A title change often costs the company nothing today, but your level usually decides which pay band you're in for future raises and promotions. If they can't give you the level now, ask for a written review date, for example at six months, with the criteria spelled out.

Other levers

• Education support. Pub. 15-B (2026) says up to $5,250 a year in employer-provided educational assistance, including student loan payments, can be excluded from your income under a qualified program.
• Equity. Stock grants, RSUs and options have their own vesting and tax rules. Our equity guide in Company Pay covers how to evaluate and negotiate them.

Scripts for asking

Swap in your own numbers and keep the tone friendly and specific.

Pivoting from base to a sign-on bonus: "I understand the base is at the top of the band. Could we bridge the gap with a one-time sign-on bonus? Leaving in [month] means giving up my annual bonus, and a sign-on of [amount] would cover that."

Asking for relocation: "Based on two mover quotes and a month of temporary housing, my move will cost about [amount]. Could the relocation package cover that, and is it grossed up for taxes?"

Softening a repayment clause: "I'm comfortable with a repayment clause. Could we prorate it monthly, apply it only if I resign or I'm let go for cause, and base it on the net amount I actually receive?"

Asking for PTO: "I currently get [number] days of vacation. Could we match that, or start me at the next accrual tier? I also have a trip booked for [dates] that I'd like noted in the offer."

Moving the start date: "Could we set my start date for [date]? That lets me give full notice and receive the bonus my current employer pays on [date]."

Closing the package: "If we can do the sign-on bonus and the relocation support we discussed, I'm ready to sign this week."

What to do next

• Write down the base you want and the non-salary terms you'd accept instead, each with a number, a reason and proof (bonus dates, unvested equity, mover quotes, PTO balance).
• Ask the recruiter which terms are flexible before you name your asks.
• Read every repayment clause for the trigger, proration, and gross-versus-net terms, and ask for changes in writing.
• Look up your state's rules on stay-or-pay agreements, and talk to an employment lawyer if the clawback is large or unclear.
• After the bonus or relocation payment lands, check your withholding with the IRS estimator so you aren't surprised at tax time.

For more on offer-stage and review-time conversations, see our negotiation coverage.