Grow Your Piggy Bank: Tips to Negotiate a Prorated Salary

Starting a new job is an exciting point in your life whether you are just starting your career or have been working in your field for 20+ years. A key element in starting a new role is onboarding and discussing benefits. When you are onboarded into a new position your Human Resources team will usually walk you through your salary and benefits packages, occasionally one of the options presented (or mandated) onto you will be a prorated salary. Employers prorate salaries for a number of reasons, in order to start off your new role on the right foot it is important to understand how your employer intends to do so so you are able to open opportunities for yourself and negotiate your forthcoming prorated salary and other benefits.

What is a prorated salary?

A prorated salary can occur when an employee is owed the amount of their salary proportionate to the number of days that were worked. For example, if an employee was hired in the middle of a pay period, their first paycheck would reflect the rate of their full-time salary but reduced in proportion to the days that were worked.

Employers pay salaried employees predetermined wages, when an employee doesn’t work their full hours, this results in them earning less than their predetermined wages. Therefore, employers must reduce what they pay their employees. A prorated salary is the result of this action, when employers divide an employee’s wages proportionally to what they actually worked. Hourly workers don’t receive predetermined wages instead earning wages for the hours they work during a pay period, which can fluctuate. Because employers pay hourly workers for the hours they work, they do not need to do any additional calculations for this type of worker. Being aware of the type of salary you are receiving and how your employer pays its employees is crucial to your success.

Opening a Discussion Regarding a Prorated Salary

While your prorated salary is determined based upon the salary you can negotiate upfront. It is important for you to discuss key aspects of your benefits package with employers before accepting a position. For example, many employers have a probationary period for new hires and employees who take time off before that probationary period ends will have to take time off unpaid. The probationary period varies among employers and can be negotiated upfront by the new hire. Some employers may also prorate annual bonuses based on when the employee started. If you accept a position halfway through the fiscal year, for example, the employer may prorate the bonus and give only half of the bonus. Being aware of your contract before you accept your position allows you room to negotiate so that you are creating the best financial offer that makes the most sense for you.

Tips to Negotiate a Prorated Salary

1. Know your worth

To negotiate a full salary or bonuses in instances where they may have been prorated, you first must know your value to the company. This is similar to presenting your resume in the hiring process however it requires you to present your verbal work history and experience as basis for your argument of why you deserve whatever prorate offer you are making. This argument should include your years of industry-related experience, years of leadership experience, education level, and licenses and certifications in your claim as to why you are worthy of a salary or bonus.

The clearer you can be in emphasizing the value you bring to an organization, the more easily you will be able to justify your salary and the additional requests you want to make regarding compensation. If you walk into a salary negotiation without a number, you’re at the mercy of an experienced hiring manager who can simply control the conversation. It is important to do your research through either an online search on sites such as Glassdoor, or by asking others in your field.

As you’re doing your research, you’ll likely come up with a range that represents your market value. It can be tempting to ask for something in the middle of the range, but instead you should ask for something toward the top as your employer will almost certainly negotiate down. By picking the top of the range you are able to account with some wiggle room to end up with a salary that you’re pleased with.

2. Prepare talking points

Similar to doing your research into your value, it is important to prepare talking points in preparation of negotiation. Preparation accounts for 90% of negotiating success. The saying ‘knowledge is power’ is extremely applicable here. Before going into the discussion, it is important to write out a list in advance with specifics justifying the number you came up with in part one for your total salary. Be prepared to tell an employer why you deserve to receive full-pay and benefits right away, rather than receiving a pro-rated salary or end of year bonus. Be prepared to reference specific achievements, awards and revenue you generated in previous positions. When brainstorming your talking points consider: do you have more experience than the job originally called for, making you over-qualified and therefore justifying a different salary than the one originally planned for the position?

Having a list of questions for your employer are also important so that you look like you care and are interested in what goes into their decision-making process. These questions include whether or not the position includes a year-end bonus, what happens to your salary if you take time off and if your bonus will be prorated based upon when you start.3.

3. Be confident

If you have done the necessary market research and compared your experience, educational background, accomplishments and skills to other open positions in your area, you should have a general idea of what your value is to a company. Be confident in asking for what you want. There is nothing that will lower your self-confidence faster than to think that you have been out-negotiated into a poor deal that you will have to live with.

Negotiation may be scary, to keep your confident demeanor Forbes recommends to keep the conversation on a positive note. In the position you are negotiating a new salary in a company you have been in for a while it may be beneficial to begin the conversation with something like, “I really enjoy working here and find my projects very challenging. In the last year, I’ve been feeling that the scope of my work has expanded quite a bit. I believe my roles and responsibilities, and my contributions have risen. I’d like to discuss with you the possibilities of reviewing my compensation.”

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