Your salary negotiation is not just about the raise and more money in your account every month. It is about fair remuneration for your work, permanent motivation, and – this is particularly important for your negotiation arguments.
Always start from the annual salary
Negotiating only about the monthly salary limits the perspective. It is essential to think in terms of the annual salary. The reasons lie in different possible bonuses or non-monetary payments. You can only compare if you have the overall result – including any disproportionate tax deductions – over the entire year in mind. Because in the end, what counts is what the bottom line comes out of for your net over the whole year.
Review implementation proposals before the negotiation
Your argumentation at the negotiation should clarify how you and your employer can achieve more real cash value for your future work performance. But what exactly do you want to negotiate about? A merchant immediately thinks of the cost allocation and payment details of the negotiation result:
- Gross or net?
- Who pays how much to whom?
- Who saves how much with what?
- Who will be directly discharged?
- Who is indirectly burdened or relieved?
- Who will receive more real salary or work from when?
- Is it a one-time, multiple, or permanent payment?
- How long does this agreement last?
You have concrete ideas and create a checklist of your most essential points for the agreement at the end of the negotiation: What are your must-have formulations, and what are optional agreements that you can do without?
Inform about additional services customary in the industry
Find out about the industry-standard values for additional salary benefits such as vacation pay. There are considerable differences in many different services. There is a correspondingly high degree of leeway for individual negotiation agreements. With this information and rough orientation values, they appear more confident and competent. The average value of your function group should always be your minimum requirement.
Negotiate personal performance awards
You usually do not need to negotiate about the voluntary annual bonus because it is a reward for the performance of the entire workforce. Negotiating personal performance awards is better. You can influence these bonuses yourself through your work and thus ensure continuity. The following applies to the premium agreement. The premium target must be formulated and attainable through your work. It should therefore be measurable and assessable so that later there are no different views as to whether the premium target has been achieved or not. Also, think about the point in time when work performance is measured: By when should the agreed performance target be achieved? Usually, it is an annual target. It is therefore helpful to have another appointment for a new salary negotiation after one year.
Agree on performance bonuses as a personal bonus
Performance bonuses motivate performance-oriented people and encourage more performance. However, such employees need goals that are clearly formulated and assessed equally by everyone. So also think of the yardstick for agreed performance bonuses. It is fundamentally easier if you agree on non-tariff performance bonuses as a personal bonus. This can be a certain amount above tariff groups that are generally paid to you based on your qualifications. This saves you the regular, rather a time-consuming examination of individual performance targets.
Think through tax-free or tax-privileged surcharges with the employer
The aim is always to allow the tax office to share in the net salary increase and make more of the company payments in real terms. Popular examples are:
- Direct insurance through salary conversion
- Company car or guarantee of mobility via vehicle fleet
- Company cell phone
- Participation in travel expenses
- Further training to increase your own “market value.”
- Own PC, internet costs for home office, telephone cost assumption
- Payment of fees for the sports club or fitness club
- Employer-funded pension
- Company shares
- Petrol vouchers or goods vouchers
Please note the different tax regulations on monetary benefits in terms of remuneration. Check on a case-by-case basis what can benefit you and your employer.
Calculate your progression limit
If you want tax-free or tax-privileged surcharges, you must always calculate your progression limit and maximum tax limits for the benefits beforehand. While this is a bit tricky, you are adding to your net salary.
It also plays a role whether the employer payment is due every month or – as with a company pension or direct insurance – only in old age when you only have to pay tax on your pension. The following applies to all additional non-monetary benefits: Take advantage of tax advantages together with your employer. It would help if you estimated your progression beforehand or calculated by the HR department so that tax components, progression levels, and social security contributions do not consume the increase.
Implement a salary increase as quickly as possible
If your raise doesn’t take effect until the end of the year, it isn’t constructive. It would help if you, therefore, insisted on immediate adaptation. The salary increase, which is not discussed until the coming months or even for the next year, costs your money. At the same time, the psychologically favorable date for the next salary negotiation is delayed.
If your employer sets percentage pay increases for all employees – which is often a tactical argument – negotiate several levels. Example: three percent increase every four months in the coming year. If you are permanently unable to achieve the desired increase in salary, try to reach an agreement with your employer on a lower monthly increase and an immediate one-off payment.
The amount of the raise
How much more money you can ask for depends on your estimated market value. A raise that deserves its name starts at 3 to 5 percent. A mean salary increase today is between 5 and 10 percent.
The subjective and motivating satisfaction of executives and employees only starts with around 8 percent more money. With top performance and promotions, 10 to 25 percent more salary can be realistic. You can only achieve a little more if you change employers.
Define the maximum, target, and minimum goal of the negotiation
Continually formulate three goals in the run-up to the salary negotiation: a maximum, a target, and a minimum goal for the salary increase. If you demand your maximum goal and then “only” achieve your personal “average” target in the negotiation, you have also satisfied your negotiating partner.
Your salary increase depends on your personal “market value” and your arguments for the company’s benefit. You shouldn’t show any false modesty here because, in practice, your salary will usually be frozen at this level for 18 months or more before the next increase is due.
Possibly renegotiate salary
You may be able to renegotiate your salary after six months. In this case, however, the framework conditions should have changed significantly. Remember, your company will most likely want to keep you a happy employee and be glad to recognize exceptional work throughout the year. If you are looking for an increase of more than 15 percent, then you should look for a new employer. If so, you need a modern two column resume template that will update your career resume design.