| I wouldn't call the tax effects of earning between £100k and £125k a 'trap'. It's an absurd way to do taxes, that I will admit. However, a pay rise between those figures is still earning you more money; your 'take home' income just rises more slowly than usual. If you expect the company to continue to exist, equity might be useful to 'spread out' your income, so that you continue to earn dividends from the shares after you've changed job and have a different financial situation. However, you say that the company is not profitable, so you won't get any dividends until it is - and that the directors choose to issue them. They are under no obligation to distribute dividends even if they are profitable. In summary, I can't answer this question: > What salary feels right to ask for? ...but I can answer this question: > Should I ask for a lower salary to avoid tax brackets but more equity in return? No, because: A: The tax brackets aren't a problem, only a disappointment - a pay rise will still earn you more than before. B: There's no indication that your company will choose to distribute dividends in the near future (especially because it is not yet profitable and may be acquired). C: You might have trouble selling your shares individually if the company isn't publically listed, and you might be waiting years for an offer from some mega-corp. If I were you, I'd only negotiate for equity if I was absolutely confident that the company was going to be bought out for a good price, meaning I could take advantage of capital gains tax being lower than the 'higher' or 'additional' rates of income tax. |