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Net profit bonus question- please help
Posted on 1/27/18 at 11:25 am
Posted on 1/27/18 at 11:25 am
If an employer is paying an incentive on net profit annually, is it common to reduce net profit by the bonus amount achieved, then pay on the new number? Does that seem fair? Does that make any sense? Do you even understand what I just asked?
4
Posted on 1/27/18 at 11:28 am to T-Mike
it's a bonus as long as the explanation is there I don't see anything wrong with it.
from a math perspective though it makes no sense. you're deducting a larger value then you would ever expend with this method.
from a math perspective though it makes no sense. you're deducting a larger value then you would ever expend with this method.
Posted on 1/27/18 at 3:11 pm to T-Mike
Usually bonuses are accrued throughout the year, and as such are already factored into the bottom line.
Posted on 1/27/18 at 3:21 pm to T-Mike
Yes, that is fairly common
Posted on 1/28/18 at 12:48 pm to T-Mike
Usually what we see is net profit before the bonus burden. If you include the bonus burden it becomes circular.
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