Finders Fee?

[jumppilot03]

I have been approached by an individual who would like to add his jet to our 135 certificate. Lately I have been working as a middle man between said individual and company. I know full well that adding another jet to the certificate will include more work for me and revenue for the company. My question is, what is a reasonable finders fee to ask for from my company? Some have said a flat rate and others a percentage. The airplane is a light jet and would double our turbine fleet currently consisting of 1 jet.

 

[Andy Neill]

It is interesting that you are seeking a finder's fee from your employer. While I could understand that if you were acting as a third party, it seems that you have a duty to your employer to link the two. It would be nice if your employer tossed you a bonus for that but that would be gravy for performing a sevice which will benefit your company and you.

 

[landlover]

1st rule of biz, don't do anything for free. Don't let your company or anyone let you believe that you should do this for free. I'd try to work out a deal where you are paid per hour the aircraft is flown, even if you aren't flying it.

 

[jaxpilot]

I came upon a possible deal on another pilot forum to trade our Lear for a Citation which is what our Pt 91 owner has been trying to do but cannot find anyone to buy the Lear. My boss said I would get a finders fee for locating the opportunity. I had no idea what to expect however. I would have thought at least $1,000 even though 1% of the Lear would be like 15,000. The deal never worked out though.

 

[jumppilot03]

I like your advice landlover. I however have no idea on a percentage or amount to ask for. Do you mind getting more specific.

 

[landlover]

I have heard of pilots getting as much as 3% but i'd say 0.5%-1.5% is the normal range.

 

[100-1/2]

1% of the management fee for the first year (monthly contract) or 3% pay raise. Which ever is higher.

You have added value to your position and presence within the organization. If you didn't already have your job, you would not offer to fly the new customer's aircraft for free, so why then would you work MORE for FREE?

Don't be bashful. Don't be demanding. Just assertive. Owners can smell fear and beat you down into a puddle with it. Your current pay check is based upon your normal and ordinary service to the company. If you have run the lead through and qualified the prospective owner to a successful and fruitful contract to them and your company, that has been beyond your normal and ordinary service and therefore commensurate with an equal monetary recognition of your contribution.

KEEP IN MIND. A "Bonus" is taxed at a much higher tax rate than your wages. Your company will write off 100% of whatever they give you while what you take home may be only 50% of the original amount.
If you can, get the pay hike! You will likely put more of the pay increase in your pocket than the bonus. Your tax accountant or turbotax can forecast 2009 for your liability under each scenario provided we have enough Republicans left that still have a set to fight Barry off for another year or two.

As your boss, I would not respect you if you didn't ask for some props for your hard work.

Good Luck!
Merry Christmas!

100-1/2

 

[fu69atacafyeah]

I have been approached by an individual who would like to add his jet to our 135 certificate. Lately I have been working as a middle man between said individual and company. I know full well that adding another jet to the certificate will include more work for me and revenue for the company. My question is, what is a reasonable finders fee to ask for from my company? Some have said a flat rate and others a percentage. The airplane is a light jet and would double our turbine fleet currently consisting of 1 jet.

$25 - $50 per hour everytime that plane flies

 

[NJAowner]

Taxes

KEEP IN MIND. A "Bonus" is taxed at a much higher tax rate than your wages.

Check with your accountant. This is not true. Note: don't have your tax professionals give you flying advice and don't have your flight professionals give you tax advice.

However, from an employee's perspective a raise is usually preferable to a bonus becuase you will raise your salary for future years. However, a raise is usually paid over a year's time and a bonus in one lump sum.

Fly safe.

 

[100-1/2]

Do the numbers on your 2007 Tax filing(if you even filed), add 3% to your wages and see your liability for the untaxed increase and then do it again with the proportionate withholdings on the increase to determine your total tax liability to find your refund or payment due. The current tax system penalizes you on January 1 if you failed to give Caesar's his share before December 31. The difference you will find from computing the two wage-increase scenarios on your last tax filing will clearly define that penalty in the neighborhood of 15-25% depending on your tax bracket.

But, I am guessing it will be easier to come up with another clever line about advice on brain surgery or rocket science.

BTW - thanks for quoting the part where I suggested an ACCOUNTANT to be a source for projecting the tax consequences for his situation. Classic NJ by far. I would renew that Hooked on Phonics subscription. Wait! I am sorry. I just noticed you are Royalty. For sure, anyone with a Lockheed Type uses Ebonics!

The point of the thread was a guy navigating the pitfalls of asking for props in this market and we were instead blessed by the wealth of your experience and type ratings to argue semantics. I will give you the benefit of the doubt not given to me and guess you should have tipped your head back just a little farther to activate the Tri-focal portion of your lenses to clearly see the line I mentioned about consulting the accountant.

I still humbly bow before your throne and kiss softly each of the Type rings upon your fingers oh mighty guidance god of the aluminum skies.

100-1/2

 

[NJAowner]

100 1/2 --

Please step away from the keyboard, take a few deep breaths and maybe even have an adult beverage of your choice and CHILL.

All I was trying to tell jumppilot was that a bonus is not taxed at a higher rate than a salary raise. It is not semantics, just the tax code. Nothing more and I hoped I saved him some $ from having to speak with an accountant about this single issue.

Fly safe.

 

[gret]

It appears we are confusing apples with oranges.

Withholding has nothing to do with your tax rate. It just the method of paying as you go. Your tax rate is based off your 1040 and whether it is classified as a bonus or salary is not relevant. It is earned income and taxed at the same rate.

If you don't withhold enough during the year, you pay when you file your return. If you over withhold, you get a refund.

 

[NJAowner]

Gret is 100% correct.

Fly safe.

 

[stknrdr]

Depending on the size and annual revenue of the company, and the size and the anticipated demand for the aircraft.....

I have seen anywhere from $500-1000 one-time bonus per plane you bring to the table. If you're bringing something larger than a light or mid sized aircraft negotiate this out right away.

"I know the company will be rewarding my efforts for the added revenue, but I'd like to have an idea of what amount you're thinking so I'll know how much additional time and effort I'll need to plan for."

Good luck....

 

[SSDD]

I'm probably not saying anything you haven't already thought about, but if negotiations are already taking place, and you haven't approached your boss about a finders fee, you are already behind the power curve.

 

[Publishers]

I think a finders fee is inappropriate unless part of your agreed upon deal in the first place. Anything that helps your company grow is good for you and I am sure that the company will welcome assistance. Coming up with it now is too late.
Ask them if they want you to look for these kind of opportunities and what additional compensation you may obtain for future ones.

 

[100-1/2]

Gret/NJ-

Before you guys warm up the bathwater and start disrobing each other, think about what you have said, really!

Your withholding are a direct relationship to your tax rate as determined by the amount of exemptions you are claiming on your W-4 as it relates to the total income of your household.

http://www.irs.gov/individuals/article/0,,id=96196,00.html

Asphinctersayswhat?

100-1/2

 

[icefr8dawg]

I've done this before.

Try to strike a deal aligning everyone's interests. If the charter revenue deal is 85/15% break it down 85/10/5% owner/management co./yourself.

Another pilot I know gets $400 a day additional salary when he flys charter on the aircraft. When added to his base beechjet salary he can really make a living for the extra work.

My problem with a rainmakers fee is it's one time and your association with the aircraft may be long term..

 

[NJAowner]

Bonuses & Taxes

100 1/2 -- We are all spending way too much time on this, but in most circumstances, the withholding on a bonus is a flat %, regardless of your tax rate, or declarations on your W-4, including exemptions. For payroll tax withholding purposes (not for tha ultimate amount of tax paid on the tax return), bonuses are generally not treated in the same manner as regular salary. Based upon what most pilots post on here, that flat rate would be in excess of such pilot's marginal tax rate. In such case, while more $$ is withheld from the check, the pilot should be entitled to a credit or refund after the return is filed, yielding an effective tax rate lower than the withholding rate.

You may want to check out:

http://www.adp.com/tools-and-resour...rces/supplemental-wage-bonus-withholding.aspx

As far as Publishers and the others, there are several approaches. A jerk employer may say that the issue was never discussed with the employee so therefore he is not obligated to pay a bonus. However, if he doesn't pay a decent bonus, my opinion is that he is short sighted and will not develop "team players" who are interested in the organization. But it goes both ways -- if the company is not interested in developing a team, don't expect your employees or pilots to act as one. On the other hand, if this is something the pilot thinks may happen often, he should negotiate for it as part of his compensation package.

Happy New Year to all and

Fly safe.