Personal Finance

Assistance? Take offer or no?

  • Last Updated:
  • May 28th, 2015 4:20 pm
Tags:
[OP]
Deal Addict
Feb 16, 2014
1628 posts
268 upvotes
Hamilton

Assistance? Take offer or no?

I have offered an upgrade to move to next leve from my company and pay raise will increased to $6000 more per year..

I currently make 73,000 and if I take this offere it will increase to 79,000?

Is 6000/year worth the headache? How much will I get back after taxes? I currently like what I do now, and next level is bit more headache and repetitive task...

If cra take allot of taxes, than it might be not worth it... Can't decide if I should take th offer or no?
24 replies
Deal Fanatic
User avatar
Jan 31, 2006
8029 posts
2357 upvotes
Toronto
So additional $500 a month or $6000 a year. Its not worth the headache at all, the take home will not much different on my opinion.
Deal Addict
Jan 2, 2015
1633 posts
638 upvotes
Toronto, ON
Provided you have the room, you could dump the extra money into an RRSP and enjoy it later. But that depends on a lot of things, like your pension plan, if any.

I wouldn't worry about the taxes one way or the other. But if the new job isn't worth the extra money, it may not be worth taking.
[OP]
Deal Addict
Feb 16, 2014
1628 posts
268 upvotes
Hamilton
I max out my companys pension every year... They match it 1.1...

Not sure 6000$/year is worth the money? i like what I do and it's not much work on my job role... I like to just go home after work and enjoy life after...

Upgrade offer is bit more ok the road and requires end user training and requires bit communication and will given corporate blackberry as well... That means answering emails and taking calls...

Stuck whether if it's worth the money or not? Will extra 6000/year somehow will effect my retirement as compare to what I make bow? Will I get more pension at the end compare to what I make now?
Deal Fanatic
User avatar
May 11, 2014
5772 posts
7786 upvotes
Rankin Inlet, NU
tester85 wrote: I max out my companys pension every year... They match it 1.1...

Not sure 6000$/year is worth the money? i like what I do and it's not much work on my job role... I like to just go home after work and enjoy life after...

Upgrade offer is bit more ok the road and requires end user training and requires bit communication and will given corporate blackberry as well... That means answering emails and taking calls...

Stuck whether if it's worth the money or not? Will extra 6000/year somehow will effect my retirement as compare to what I make bow? Will I get more pension at the end compare to what I make now?
Any possible room to grow from that offer? Would taking that offer allow you to move even further up? If that's the case, even though the pay increase is minimal for the work, it might be worth the work investment.
Deal Addict
Mar 8, 2013
2812 posts
1487 upvotes
The tax question is easy to answer. In Ontario, you will pay 32.98% on taxable income over 72K. So $6000 per year is worth about $4000 after taxes. But the key question is what kind of person are you? If you have no obligations, and are willing to do the same type of work for who knows how long, then don't take the upgrade. You may not get another offer. If you want to move up in the company or expect to have a family to support, you might need to take it. But there's no point in being miserable for a few $.
Deal Addict
Jan 2, 2015
1633 posts
638 upvotes
Toronto, ON
tester85 wrote: Stuck whether if it's worth the money or not? Will extra 6000/year somehow will effect my retirement as compare to what I make bow? Will I get more pension at the end compare to what I make now?
That's something you need to ask HR. Where I work, pension is based on X (low) percentage times working income times years of service (comes out to roughly 40% for a 30+ year working span), and I know some companies use just your five highest earning years of income. HR would have the answer for that. Or... perhaps you meant you have a matching RRSP plan. This makes determining post-retirement income, but it also means contributing even more to RRSPs won't do much for you unless your max contribution percentage is low.

Would an extra $3000 per year after retirement (pre-tax) be worth it? Only you can judge.
Jr. Member
Sep 26, 2009
129 posts
16 upvotes
I can see a variant of the Peter Principle taking shape here. The variant is: "Any happy worker will repeatedly take a higher-paying job. The job that makes the worker unhappy will either be terminal, or the worker will quit and start something low-paying and for which he or she is untrained and unsuited, such as hog-farming." Feel free to call it the Second GrapeBunch Principle. The First GrapeBunch Principle is: "Every variant of the Peter Principle has already been stated, ad nauseam."
Deal Addict
Apr 21, 2014
2316 posts
1100 upvotes
Alberta
tester85 wrote: I have offered an upgrade to move to next leve from my company and pay raise will increased to $6000 more per year..

I currently make 73,000 and if I take this offere it will increase to 79,000?

Is 6000/year worth the headache? How much will I get back after taxes? I currently like what I do now, and next level is bit more headache and repetitive task...

If cra take allot of taxes, than it might be not worth it... Can't decide if I should take th offer or no?
6k raise when you are making 70k pe year sucks if it's a promotion. You should be looking for 10k or so. It's not even a 10% raise. I would take it only if I plan to get the title, work for a bit and then leave and make more money.
Deal Addict
User avatar
Oct 9, 2005
1105 posts
382 upvotes
Toronto
How many more years do you plan to work? The +6k pre-tax is ~4k after-tax for 20 years earning 5% after-tax in a taxable account (assuming you already are maxing TFSA/RRSP) adds up to a fair bit more for retirement, roughly 132k. Maybe adds 10 years of retirement on a thrifty lifestyle. Or you could retire a few years earlier, but if the extra work isn't intolerable, why would you? ;)

You should confirm how extra salary impacts your company's pension plan, but it sounds like it's a DCPP. Assuming they match per point up to 5%, an extra 6k gross salary would mean you put in an extra $300/year, and they put in an extra $300. 20 years of the $300/yr employer matching at 6% tax-sheltered rates is ~10k, so a drop in the bucket.
Intricated
[OP]
Deal Addict
Feb 16, 2014
1628 posts
268 upvotes
Hamilton
GrapeBunch wrote: I can see a variant of the Peter Principle taking shape here. The variant is: "Any happy worker will repeatedly take a higher-paying job. The job that makes the worker unhappy will either be terminal, or the worker will quit and start something low-paying and for which he or she is untrained and unsuited, such as hog-farming." Feel free to call it the Second GrapeBunch Principle. The First GrapeBunch Principle is: "Every variant of the Peter Principle has already been stated, ad nauseam."
Iv done this job for 8-10 months and seems bit more repetitive and requires bit of on the road allot.

The one good where I am right now, i have like 100 different tasks i need to do and there's something new everyday. over time, doing any job becomes repetitive.
[OP]
Deal Addict
Feb 16, 2014
1628 posts
268 upvotes
Hamilton
Yah, mine is based on 5 best years or the last 5 years of your company before my early retirement at age 55.

3000 x 25 = 95000/ for 25 yrs from today.

I do max out my RRSP and maybe i can put 3000 into TFSA every-year?


FoFai2015 wrote: That's something you need to ask HR. Where I work, pension is based on X (low) percentage times working income times years of service (comes out to roughly 40% for a 30+ year working span), and I know some companies use just your five highest earning years of income. HR would have the answer for that. Or... perhaps you meant you have a matching RRSP plan. This makes determining post-retirement income, but it also means contributing even more to RRSPs won't do much for you unless your max contribution percentage is low.

Would an extra $3000 per year after retirement (pre-tax) be worth it? Only you can judge.
[OP]
Deal Addict
Feb 16, 2014
1628 posts
268 upvotes
Hamilton
I plan to work for another 25 year and I can retire early at age 55. I already contributed 5 years to this company. I do max out my RRSP every year.

My Manager currently has 12 people and if I decide to move up, than I need to change my manager and new one only has 4 people under his control.

I have feeling they might can him in 3-7 years? -He lost most of his employees(transferred to other managers) and and went from managing 15 people down to only 4 people..

Intricated wrote: How many more years do you plan to work? The +6k pre-tax is ~4k after-tax for 20 years earning 5% after-tax in a taxable account (assuming you already are maxing TFSA/RRSP) adds up to a fair bit more for retirement, roughly 132k. Maybe adds 10 years of retirement on a thrifty lifestyle. Or you could retire a few years earlier, but if the extra work isn't intolerable, why would you? ;)

You should confirm how extra salary impacts your company's pension plan, but it sounds like it's a DCPP. Assuming they match per point up to 5%, an extra 6k gross salary would mean you put in an extra $300/year, and they put in an extra $300. 20 years of the $300/yr employer matching at 6% tax-sheltered rates is ~10k, so a drop in the bucket.
Deal Addict
Oct 29, 2010
4395 posts
743 upvotes
Seems kinda low for a promotion to be honest, but i guess it's not really a promotion. Annual pay increase alone can be around the same amount of money they offered you, so unless it leads to something better down the road, not sure it really gives you anything.
Deal Fanatic
Aug 25, 2005
5403 posts
2639 upvotes
take it. cause your next raise will be based on 79k.
Deal Expert
User avatar
Jul 30, 2007
32071 posts
19284 upvotes
Toronto
just pay raise ? any perks ? Even with no perks, any bump in raise this day is 99% better than what most people will ever get.

You can take the raise now and explore other job opportunity out there in next couple of years time.
Deal Addict
Jul 8, 2013
3008 posts
4961 upvotes
Somewhere in AB
If you're happy in your role, love your boss, and are learning everyday in your current role (you've only had it for less than a year) then stay put.

But, if you are super aggressive in your career, don't mind working extra and take on more than what you get paid for, then climb up the corporate ladder and get the higher-paying job.

Based on my perception of you (what you say, your grammar, etc.), it appears that you should just stay in your current role. No one will ever fault you for that, but only if you are happy with what you are doing.

A lot of people will tell you to follow the money but ask anyone in their 50s or 60s, and they will say that follow your heart first and money will follow. $73K is already a wicked salary as it is (do you mind telling me what it is that you do?). A $6K bump will be around $150 extra every paycheque, depending upon other employer deductions.
[OP]
Deal Addict
Feb 16, 2014
1628 posts
268 upvotes
Hamilton
I'm still in my 20's and in I.T.

My hours of service will remain the same. I don't think I can move up anymore beyond this level as I don't like stress or boss over my shoulder asking about updates.

I do have weekend job that I like I.e. Front desk at hotel, but this is something I don't mind at all.


TuxedoBlack wrote: If you're happy in your role, love your boss, and are learning everyday in your current role (you've only had it for less than a year) then stay put.

But, if you are super aggressive in your career, don't mind working extra and take on more than what you get paid for, then climb up the corporate ladder and get the higher-paying job.

Based on my perception of you (what you say, your grammar, etc.), it appears that you should just stay in your current role. No one will ever fault you for that, but only if you are happy with what you are doing.

A lot of people will tell you to follow the money but ask anyone in their 50s or 60s, and they will say that follow your heart first and money will follow. $73K is already a wicked salary as it is (do you mind telling me what it is that you do?). A $6K bump will be around $150 extra every paycheque, depending upon other employer deductions.
[OP]
Deal Addict
Feb 16, 2014
1628 posts
268 upvotes
Hamilton
I like my company where I work. No plans on leaving as they provide enough pension and benefits.


booblehead wrote: just pay raise ? any perks ? Even with no perks, any bump in raise this day is 99% better than what most people will ever get.

You can take the raise now and explore other job opportunity out there in next couple of years time.
[OP]
Deal Addict
Feb 16, 2014
1628 posts
268 upvotes
Hamilton
Still in my 20s and single. Yes, it might be hard for me to move up bcuz another offer might not come up another 4-6yrs.

At the moment earning more money is not a priority at the moment.

akaManny wrote: The tax question is easy to answer. In Ontario, you will pay 32.98% on taxable income over 72K. So $6000 per year is worth about $4000 after taxes. But the key question is what kind of person are you? If you have no obligations, and are willing to do the same type of work for who knows how long, then don't take the upgrade. You may not get another offer. If you want to move up in the company or expect to have a family to support, you might need to take it. But there's no point in being miserable for a few $.

Top