For ENY that $50k isn’t paid until you flow. So for guys that eventually qualify for the two $25k bonuses, they will be paid $120k upon flow to AA. The $30k CA bonus is the only thing paid pre-flow and comes with a 3 year commitment, not pro-rated. Envoy wants that $30k back within 30 days of your resignation if you leave before 3 years.

Please place your hands behind your back while Envoy handcuffs you to this circus if you choose.

Also the pay raise only effects 1/3 of the pilots at envoy the rest get nothing in new rates.

you can’t always get what you want.

But if you try sometimes, well, you might find
You get what you need

Dammit!

Beat me to it.

So, the bonuses are completely meaningless. People who were going to stay/flow anyway will make extra money, and everybody else who can do addition realizes they'll make more money than this and have a better QoL, even if they go to an LCC a year earlier than flow. This might encourage more people to at least apply to AA outside the flow, but that's about it.

Are we going to have to sign something to get the $30k or are they just going to deposit $22k after taxes in our account, then demand $30k back when we go somewhere else?

Hey if they deposit the cash without making you sign anything then you're the big winner here lol.

I think after taxes that 30 isn’t going to look like 22…

You’re right. It’ll be more. I don’t understand why people can’t wrap their head around the fact that withholding is different than actual taxes. Yes, the withholding is higher. However, you’ll get a bunch of it back when you file because the effective tax is lower than what the withholding is.

Everyone knows you pay more in taxes on bonuses. They teach you that in indoc during the finance section. It’s right after virology and just before relationship counseling.

No, you don’t. The withholding is higher. That’s it. At the end of the year your gross income is what determines the tax rate. If the bonus put you in a different tax bracket then yeah, it’s taxed slightly higher. However, if you are sitting below 80k gross your effective tax rate will be around 18%ish. So, that’s what you’re taxed at. None of us in the regionals with the single regional income will be in high tax brackets where you wouldn’t get some of that withholding back.

You are getting an FAA violation for altitude deviation between his joke and your comment.

My bad, missed the joke completely. I just get frustrated when people don’t understand the difference between withholding and actual taxes and missed the second part of his statement. Eh well, now that’s there for someone to maybe see and learn.

Lol I get that way when folks complain about a raise because it'll put them in a higher tax bracket 🤣

I understand the difference, but I do appreciate you explaining it for anyone watching. I’ve had to explain it many times myself so it’s good to see the info out there. All I’m saying is that if you’re expecting an extra 22k on your paycheck, you will be disappointed. Although you could do some mighty fiddling with your exemptions to try to keep more of it from being withheld, not sure…
Also…are AA WO captains not clearing $80k?!

I do too, just couldn’t resist the opportunity.

Was more referring to the FO side. I’m pretty sure every regional captain is clearing $80k.

I had a CA complain about this once after we got our pay raises. "Im actually making less now because I pay more in taxes".

It was a long 4-day.

I almost told him just wait until you get to AA and you make so much money you end up having to pay the government!

I wonder if this is sort of possible.

I understand how marginal tax rates work on an annualized basis. You don’t ever lose money by making more

but what about withholding? Could a midyear shift in income cause required withholding to increase such that for a few months you lost ground? You still don’t lose money over the year but maybe a transient dip in take home pay?

I'm not good enough with withholdings to say for certain, but I feel like the absolute worst you might see is a smaller increase than you figured.

Either way like you said, even if you could manage it you'd just be made whole again on your tax return.

Check out the IRS form 15-T, it discusses withholding methods. Should be relatively easy to go through the same way an employer would when calculating withholding, to see the effect of a pay shift.

I'm not a financial advisor. Witholding is really just a zero interest loan you make into an escrow account with the government, so you're guaranteed to be able to afford your approximately $20k tax bill every April. You could withhold nothing, take all of that money, invest it into SPY and make 15-30% off of it, but just make sure you can afford the bill in its entirety when it comes due. If weird stuff happens with your pay and you haven't withheld enough, you owe some money when your taxes come due. If you overpaid, you get the excess paid back to you at straight value, without any interest.

So our PDT LOA came out and with all the strings attached, and the way I'm reading it, it does very little unless you go to AA as either a direct hire or flow. I'm trying to fully wrap my head around everything, so here's my analysis. Let me know if I missed anything. Also, I get the "if you don't want the money, don't take it, don't complain, how can you complain about getting money," but I'm absolutely going to lawyer my way through all the strings and fully understand what's on the table, and if it's a bad deal, I absolutely won't take the money, but I'll understand why.


Here's the break down:

1 - $30k for CAs or anybody who upgrades, with a 3 year commitment, otherwise you have to give it back, and they get that in writing.

2 - $70k for anyone who goes to AA, either through flow or OTS, on their final paycheck

3 - $25k each year for two years for anyone who flew 864 hours for the applicable year, but it's not paid out until their final paycheck and only if they go to AA. Pilots absent with vacation, mil leave, leaves of absence, and sick leave will be credited up to 164 hours.

4 - At PDT, for new hires, you now have to be a captain to flow

5 - The flow is increased by 3 if non-AA attrition is below 3, and increased by 1 if the non-AA attrition is below 7.

6 - Pay rates increased to 0-76 seat aircraft rates, What this translates to is the pay in unchanged for FOs and set to go up by 50 cents a year through 2023. For CAs it's between $8 and $9 per hour increase, set to increase by 75 cents per year.


So what AA wants/expects is status quo for FOs, then a $30k bonus in exchange for a 3 year contract when we upgrade to CA, no more than 2 months away (plus vacation) for military, leaves of absence, health issues, etc (fair enough), then we deny offers to other airlines and wait to either be hired or flow to AA, and we get $120k.

1 - You can take the $30k, invest it in something safe and make some money, then give it back if/when you get hired somewhere else. Make sure your finance dept takes the $30k out of your earnings on your W2, otherwise you'll get stuck paying the taxes on the $30k. I'm pretty sure this should work the same way if you give the money back year 2 or 3. (I'm not a financial advisor)

2 - Unless you were already going to AA, $70k (or $120k) is not enough to defer the seniority, pay, and quality of life at another legacy or LCC. If you're a new CA or senior FO, you could probably go to an LCC for a few years, get the same or better career earnings, spend a few years with much better quality of life, then still get hired by AA at about the same time, and end up with a similar seniority number (if you actually wanted to leave).

3 - See "2." 864 - 164 = 700 hours, so with vacation, you need to credit an average of 64 hours/month. If you're gone for 2 months, plus the vacation month, you need an average of 78 hrs per month. Definitely disincentivizes mil leave (if you wait for AA)

4 - Should've always been this way IMO

5 - If nobody leaves for outside attrition, then 9 flow that month, meaning a 6.3 year flow for new hires. If attrition is below 7 (so 3-6 per month), which was normal to slightly lower-than-normal pre-pandemic, the flow is increased by 1. What I see happening is a lot of junior CAs leaving, so the flow is effectively unchanged, with maybe an extra 1 every now and then.

6 - The pay raise is nice for CAs.


Overall, I see the bonuses as gimmicks that look good from a distance, but don't make sense when you get close. $30k with a 3-year commitment would cause people to walk away from 135 operators, let alone a regional trying to tie you down from the majors. The rest of the bonuses don't come until you go to AA, so what they're trying to do, is pay us $120k to stay in the regionals, longer.


The real question is how much of a sacrifice (in regards to time) is $120k worth to stay at PDT instead of going to another major? Factoring in seniority during lots of movement, pay at the front end, pay at the back end of your career, plus quality of life... I'm thinking if you're a month from flow and Delta calls, might as well flow. But 5 months out, probably better off leaving. Like I said, I think the money is great for people who were going to go to AA anyway. For everyone else, we get a 10% pay raise as CAs, but everything else is unchanged, and since they gave us something, it might be a while before we have leverage to get anything else.

So honest question: why does everyone always put the "not a financial advisor" disclaimer in their financial posts? Is there actually precedent for someone pursuing legal action against an anonymous forum poster, or do you guys just do it as a courtesy to the reader in case your advice turns out to be incorrect?

two things here:

1) you absolutely cannot just stop all withholding and pay in April in a large chunk. You will get fined and subject to quarterly tax filing.

2) LMFAO @ expecting 15-30% annual returns from SPY to be the norm

SPY calls bruh

Worked great in March 2020...

Who's SPY?

actually you can

you will only be assessed (fairly moderate) penalties and fees if your tax payments were
1) less than owed, AND
2) less than you paid last year

in the situation of a significant windfall bonus, you could reduce withholding for the rest of the calendar year and pay in April.

2) SPY is the gold standard for "the market" and it's your best bet for outpacing inflation with low-risk, steady gains. It's average performance from the 20s to 2019 was around 10% per year (higher lately, but so is inflation). $8,000 invested in 1980 would be almost $800k today. Regardless, the specific value of projected gains wasn't the point

To people asking what SPY is, it's the S&P 500: https://en.wikipedia.org/wiki/List_o..._500_companies

I thought that was VTSAX?


Sent from my SM-N986U using Tapatalk

If you're a doomsdayer, then it's VIX

yeah for the flow payments, you could. I took the post I responded to as someone doing this to their whole income

Same result. It's 0.5% per month for the amount you've underpaid. https://www.investopedia.com/avoid-a...enalty-4582634
Not advising anyone do this though. The point is that If you invest a little every paycheck and cut it really close on your withholding, then it's not the end of the world if you come up a little short at the end of the year... as long as you didn't lose it all on weekly YOLO GME OTM calls

VOO is cheaper. YMMV.

Envoy captains don't clear 80 on min guarantee either

Rising tides and all that...

VOO only tracks the S&P 500. VTSAX or VTI claim to track the “Total stock market”. Index fund and equivalent ETF

I didn’t clear $80k as a 6yr captain last year. :(