One-off cash against permanent pay.
A worked example
Starting figures
- One-off bonus
- $12,000
- Yearly pay rise
- $4,000
- Marginal rate
- 30%
- Years to compare
- 5
What it returns
- The rise wins
- $5,600
- Bonus after tax
- $8,400
- Rise after tax over the period
- $14,000
- Break-even years
- 3.0
How to read the results
With the defaults above, the rise wins works out at $5,600.