Keeping Up With The Bulls

A personal finance blog focused on making more money, saving money and smart spending.

Get Paid for Connecting Others: A Guide to Referral Job Opportunities

by // 2 Comments

Employee Referral Bonus Program, employee referral benefits, referral bonus program, make money referring jobs

Want to make extra money at your job? Get paid for connecting others to their next job through your employee referral bonus program. These programs can make you extra money by referring your friends to open positions at the company you work for. One workplace benefit not talked about frequently is the employee referral bonus program. Employee referrals make up between 30-50% of hiring in the US. These programs help companies hire great talent quicker and they usually offer their employees a referral bonus if they hire that candidate. Make extra money referring jobs with these simple steps below.

Make Money Referring Jobs To Someone You Know

Do you already know who you want to refer to your company? Help them narrow which job they should apply to. If the job candidate only knows they are interested in the company, it’s hard to refer them and help them. Share information about different departments, certain roles you’d recommend and give them the link to search all open jobs at the company. Check in with them a couple days later and ask what jobs they are interested in. Then, submit their resume for that specific job opening.

If you know of an open position, but an immediate candidate doesn’t come to mind use social media to promote the job.

Leverage Social Media To Promote Open Jobs At Your Company

Use social media to promote open positions at your company. LinkedIn is a great platform to post job opportunities. Sometimes companies have example social posts to promote jobs to make it easy to share an open role. When a potential candidate reaches out, set up a meeting with them. Be available to answer their questions. Provide the potential job candidate background about the company and the job. If they’re still interested, refer them to the open job.

Refer A Candidate Following The Employee Referral Program Instructions

How do you make money referring jobs? First, confirm that your company offers an employee referral bonus. Next, know the terms of this program. Do you need to submit a referral following a specific process? Does the candidate need to stay with the company for a certain amount of time? In all cases, the person you refer needs to get the job. You must ensure that your company knows you referred that candidate.

Large companies likely have a portal for you to refer a candidate. If your company doesn’t have a portal, ask your manager or HR how to refer a candidate. Submit their resume through this portal and also reached out to the hiring manager or recruiter.

Employee Referral Bonus Amounts

How much money should you make referring jobs? Many companies tie incentives to employee referrals. Average employee referral bonuses amounts are typically in the $1,000-3,000 range. Of those companies that offer employee referral bonuses Meritage Talent Solutions found that 69% offered between $1,000 and $5,000. At one point the tech industry was offering up to $20,000.

Companies That Offer Employee Referral Bonuses

Many companies offer employee referral bonuses. Below are a few examples of companies that pay an employee referral bonus:

Glassdoor shares that the Apple employee referral bonus program pays $500 to $3,000 depending on the position and rumored to pay more in some cases.

Dell has a global employee referral program and shares the exact payout amount by level of position and location in a central location.

In 2015 Intel announced the employee referral bonus would be double for women, veteran and minority candidates that are hired. Employees were able to get $4,000 per hired referral, up from the standard $2,000.

At eBay, employees may receive up to $1,000 if their referral is hired.

Digital Ocean launched an employee referral bonus program in 2017. Digital Ocean offered $3,500 and a $1,500 charitable contribution paid on the employees behalf.

Employee Referral Programs Summary

Many companies ask their employees to help recruit new talent and offer an employee referral bonus if they get hired. Minimal effort is required to make money referring jobs. If you’re looking for a quick way to make cash and your company is hiring see if this is a benefit your company offers. Employee referral bonus amounts vary company to company so check with your company first to confirm what bonus amount they offer.

Have you ever taken advantage of the employee referral program offered by your employer?

The Ultimate Guide To Employee Stock Purchase Plan (ESPP)

by // Leave a Comment

Why You Should Enroll in an employee stock purchase plan

Why do you care about Employee Stock Purchase Plans (ESPP)? If you enroll in the employee stock purchase plan offered by your company you can make more money! ESPP is a benefit offered by some publicly traded companies to their employees. ESPP is the ability to purchase company stock through payroll deductions at a discounted rate.

The effort required is minimal and requires enrolling in ESPP and selling the shares to realize gains (or losses). You have a guaranteed return if you sell the day you receive the shares. If you decide to hold the shares for longer, and the shares increase in value, it will help you accumulate wealth. Companies can offer a maximum discount of 15% on company shares. With current savings accounts interest rates at best at 1.5% APY, and average stock returns at 5-7% a year, but not guaranteed, this is a great deal.

If you’re considering enrolling in ESPP here are the terms you should know, the benefits of ESPP and approximately how much extra income you may be able to make.

Employee Stock Purchase Plan Terms To Know

  • ESPP Enrollment Period: defined set of dates where you can sign up to participate and select the % election amount. If you miss this enrollment period you will have to wait for the next enrollment period (either 6 months or 1 year later depending on the terms)
  • ESPP Purchase Period: Timeframe in which company shares are purchased on your behalf through payroll deductions. There may be two purchase periods a year, one beginning Jan 1st  and ending on June 30th, with the second starting July 1st and ending Dec 31st. You do not have access to the money you’ve contributed during this time.
  • ESPP Purchase Price: Usually, the purchase price is the price of the stock on the last day of the offering period, with the discounted rate applied. In the example above, it would be the ending stock price on June 30th and December 31st.
  • ESPP Holding Period: You can sell your ESPP shares at any time, even the same day you get the shares. However, in order for the sale to be taxed as a capital gain it must be considered a qualifying disposition.
  • ESPP Qualifying Disposition: A qualifying disposition refers to a sale, transfer or exchange of stock that qualifies for favorable tax treatment. ESPP falls within this definition. To be a qualifying disposition, the employee must sell their position at least one year after exercising the stock or two years after the beginning of the ESPP offering period. As long as you hold your ESPP shares for this time period you are taxed at a capital gains rate. If you sell prior to this period, it is considered a disqualifying disposition. A disqualifying disposition is taxed at the income tax rate.

Employee Stock Purchase Plan IRS Limits

The IRS imposes a limit of a maximum market value of $25,000 per year. However, companies can decide to impose lower limits. That means if your company grants you shares at a 15% discount, the max you can contribute is $21,250. The purchase discount also tops out at 15%, but your company could choose to offer less than that as well. Every plan can vary so be sure to look into the details around what plan your company offers.

Employee Stock Purchase Plan Tax Rules

The stock discount price (up to 15%) is considered additional compensation and taxed as ordinary income. If you sell that day, it is disqualifying and will be taxed as a short term gain / ordinary income. If you hold shares for at least 2 years from the first day of the offering period and at least one year from the purchase date, the additional income is considered a “qualifying dispositioned” and will be taxed as a long-term capital gain (15% tax rate for most taxpayers).

Additional Income Earned with Employee Stock Purchase Plan

The tables below offer a guide to how much additional income you can make after taxes if you sell that day per year. If you decide to hold onto the stock for the time period outlined below, your taxes will be 15% (for most taxpayers) for the discounted amount + any gains you made while holding the stock. Remember, it is always possible for the stock to lose value.

Additional income you can make from participating in an employee stock purchase plan by tax bracket when you sell the same day you get the ESPP shares for single tax filers
*1% assumes average (mean) income of tax bracket
**Assumes all income would have been taxed at the rate of that bracket
Additional income you can make from participating in an employee stock purchase plan by tax bracket when you sell the same day you get the ESPP shares for married filing jointly tax filers
*1% assumes average (mean) income of tax bracket
**Assumes all income would have been taxed at the rate of that bracket

It’s hardest to maximize the program when you make less money, but that’s when this is actually the most valuable! When your tax rate is only 22%, you could make almost $2,500 after taxes. If you’re in the highest tax bracket you make only $2,000 after taxes. The first purchase period is always the toughest. You’re used to getting that money in your paychecks every pay period. After the first purchase period is done, if you sell all your shares immediately you have everything you’ve invested from the past 6 months plus the additional income you made as soon as the sale settles!

If you work for a public company, check out your internal benefits page and see if this is one of the benefits your company offers!

See Also: Company 401(k) Match and Why You Should Max Out Your 401(k)