A signing bonus or sign-on bonus is a sum of money paid to a new employee by a company as an incentive to join that company. These are often given as a way of making a compensation package more palapable to the employee if an annual salary is lower than they are currently making or if any other element is less desireable. It also lowers the risk to the company as the signing bonus is a one time payment. Should the employee not meet expectations, the company has not committed to a high salary.