Is Repunlic Services Giving Bonus For Tax Break

These Companies Gave Bonuses or Raises Later on Tax Reform

Author: Adam Levy | May 24, 2018

Source: Getty Images

Taxation savings are beingness passed down

President Trump signed the Tax Cuts and Jobs Acts into police force on Dec. 22, 2017, reducing personal income taxes for most families for the next 10 years. Corporations, however, received much bigger and more permanent tax cuts with the new law reducing the corporate tax rate from 35% to 21% and reducing the tax on repatriated cash to 15.5%. The Congressional Upkeep Role estimates businesses volition save about $320 billion in taxes over the next 10 years.

The taxation overhaul prompted hundreds of businesses to offer bonuses and pay raises to their workers and expand employee benefits. Here's a selection of companies that take passed on some of their savings to their employees.

ALSO READ: What Will Retailers Do With Billions in Corporate Tax Savings?

Source: Aflac

i. Aflac

Aflac's (NYSE: AFL) U.S. employees received a squeamish heave to their 401(k) accounts post-obit the passage of the tax cuts. Each employee received a i-time $500 bonus contribution. Additionally, Aflac increased its matching contribution to 100% of the commencement 4% of employee's contributions. Aflac now also offers certain hospital and accident insurance products to all employees free of charge.

Aflac is a large casher of the taxation reform, in particular the repatriation revenue enhancement changes, which require companies to pay taxes on overseas assets, but at a significantly reduced rate. Aflac generates most of its revenue in Nihon, and the new repatriation taxation means a significantly lower overall tax rate. The $500 bonuses and increased 401(k) match is simply a small portion of what Aflac stands to gain from the new tax code.

Source: Alaska Air

2. Alaska Air Grouping

Alaska Air Group (NYSE: ALK), the parent company of Alaska Airlines, Virgin America, and Horizon Air, paid out $i,000 bonuses to its 23,000 employees at the end of January. Those bonuses tin help brand up for some operational challenges the company faced in 2017, which may bear on annual performance-based bonuses. All told, Alaska Air paid out $148 million in bonuses including the one-time bonuses for taxation-reform.

Alaska is a growing airline group investing in growing its fleet. As such, it stands to benefit greatly from the new ability to deduct capital expenditures immediately, rather than depreciating those investments over a longer period. The company plans to spend $1 billion on capital expenditures in 2018 and $750 one thousand thousand on capex in 2019 and 2020, which it can at present immediately deduct from revenue.

Source: American Airlines

3. American Airlines

American Airlines (NASDAQ: AAL) employees, excluding officers, received a $one,000 bonus sometime during the first three months of 2018. The total amount came to virtually $130 million.

Interestingly, American Airlines doesn't stand to benefit that much from tax reform, since it already doesn't pay any cash taxes. Information technology continues to acquit forrad losses from the by. That said, it's spending a large corporeality on refreshing its fleet, establishing the youngest fleet of planes amidst major airlines. It tin can do good from the immediate deduction of its capital expenses, and save those losses for the hereafter. Whether or not that'south really a smart move is another debate.

Source: Getty Images

4. Altria

Altria (NYSE: MO) paid its 7,900 not-executive employees an extra $three,000 earlier this yr, totaling about $24 million. The visitor is also increasing its philanthropic giving past $35 1000000 over the side by side three years.

Altria has already seen some big positive impacts from tax police changes. It recorded a $iii.four billion net tax do good in the fourth quarter. It will farther benefit from the lower repatriation taxes on its investment in Anheuser-Busch InBev. For the full twelvemonth, Altria's management expects its taxation charge per unit to fall to between 23% and 24% compared to 33.4% last yr. With $2.ii billion in income before taxes, that's some other $220 million per year in cash for Altria, which it will likely apply by and large to go along increasing its dividend.

ALSO READ: Altria's Large Earnings Boost Leaves Investors Unsatisfied

Source: Anthem

five. Anthem

Canticle (NYSE: ANTM) is padding 58,000 employees' and recent retirees' retirement accounts with an extra $ane,000 thank you to its expected tax savings. Canticle is automatically establishing 401(1000) accounts and funding them with $1,000 for employees that haven't opened one all the same.

Anthem laid out how information technology plans to distribute its gross savings from tax reform during its fourth quarter earnings call. 25% will get back to the customers through things like medical loss ratio rebates. Some other 25% volition become toward investments in engineering science modernization efforts to improve consumer experience and develop new products to improve efficiency. The last 50% will get returned to the shareholders.

Management expects its constructive tax charge per unit to come in between 25.5% and 27.5% this yr. That's down from taxation rates effectually 45% in 2015 and 2016. And so, at that place'due south a lot of savings to go around. Employees volition see just $58 million, though.

Source: Apple

six. Apple

Apple tree (NASDAQ: AAPL) issued a grant of $2,500 in restricted stock units to all individual contributors and management up to and including senior managers worldwide at the commencement of the year. Both full-fourth dimension and function-time employees across all aspects of Apple's concern were eligible. Apple is also matching its employees' charitable contributions ii-to-1 up to $x,000 for 2018.

Apple is the largest tax payer in the United States, and it benefits greatly from the changes to the tax code. Apple held around $250 billion in cash overseas, and it'south now able to bring that back to the U.S. at a 15.v% tax rate compared to a 35% tax rate previously. Apple tree expects the changes to result in an effective taxation charge per unit of only 15% compared to about 25% over the last few years. When we're talking about $lxx billion in earnings before involvement and tax, that'south a big clamper of savings.

Source: AT&T

seven. AT&T

AT&T (NYSE: T) gave 200,000 employees a $1,000 bonus at the end of last year. President Trump specifically chosen out those bonuses in a press briefing announcing the passage of the new taxation bill. AT&T might have been one of the first to announce bonuses after the passage of the nib in order to win favor with the Trump administration equally information technology'south seeking approval of its conquering of Time Warner (NYSE: TWX), which was blocked by the Department of Justice.

Telecom companies stand to exist some of the biggest beneficiaries of the new revenue enhancement police. AT&T expects to keep an boosted $three billion in cash in 2018 compared to what it would have paid under the old revenue enhancement law. That's after planning an boosted $i billion in majuscule spending this year. The total-yr impact of taxation reform volition be $0.45 per share, which is about a 15% increase in earnings only from lower taxes.

Source: Bank of America

8. Bank of America

Bank of America (NYSE: BAC) employees earning less than $150,000 per twelvemonth will receive a bonus of $1,000 by the finish of 2018 if they haven't already. Management says about 145,000 employees are eligible for the bonus. It also raised its minimum wage to $fifteen per hour in February.

Management also noted that the tax cuts provide an opportunity to advance its investments in key areas such equally establishing more of a physical presence in key markets and increased applied science spending.

Depository financial institution of America expects the changes in the tax code to reduce its tax rate by 9 per centum points. In the first quarter, it reported pre-tax income of $eight.four billion, implying a revenue enhancement savings of well-nigh $750 one thousand thousand in the first three months of the twelvemonth.

Also READ: What to Look From Bank of America in 2018

Source: Best Purchase

9. Best Buy

Best Purchase (NYSE: BBY) paid out $1,000 bonuses to all full-time store employees and non-bonus eligible corporate employees. It besides gave $500 to part-time employees. The bonuses full about $75 million. Going frontwards, management says it plans to brand improvements to its employee do good programs.

Best Buy will spend a lot more than money increasing its dividend, which it upped 32% last quarter, and its share repurchase programme, to which it added $500 million in authority for this year. It'due south also increasing capital expenditures by about $75 1000000 at the midpoint of its guidance. Overall, management expects its effective tax rate to fall to 25% this year, downwards from well to a higher place xxx% in prior years.

Source: Getty Images

10. CarMax

CarMax (NYSE: KMX) paid out bonuses ranging from $200 upward to $1,500 to well-nigh of its total-time and part-time associates earlier this year. The amounts vary based on tenure and full-time status. About 80% of CarMax employees received a bonus, including hourly employees and those paid on commission. The total corporeality spent on bonuses came to $8 1000000. Management is as well investing in improving its benefit plans.

CarMax direction says it expects 70% to 85% of the benefits information technology sees from tax reform to hit the visitor's bottom line. It is planning incremental investments in engineering science to improve its digital capabilities, and information technology'southward planning to open 15 new stores this year, but most of the tax savings will benefit shareholders.

Source: Charles Schwab

xi. Charles Schwab

Charles Schwab (NYSE: SCHW) was alee of the curve, as information technology paid out a $ane,000 bonus to near 9,000 non-executive employees concluding twelvemonth in apprehension of the changes in the tax lawmaking. The company also expanded its parental get out program for all employees, and increased its charitable giving. It'southward made plans to increase hiring as well, expanding its offices to house upward to 4,000 new employees.

Management expects to run into its constructive tax charge per unit fall 11.five% to 12% for 2018 and across compared to 2017. With such strong earnings growth at the company already, that could result in over $500 million back in Chuck'south pocket for 2018 alone. For reference, those bonuses it paid out last twelvemonth totaled just $9 million.

Source: Charter

12. Charter Communications

Charter (NASDAQ: CHTR) announced plans to increase its minimum wage to $xv per hour by the end of 2018 forth with its fourth quarter earnings results in February. Information technology's unclear how many of Charter'south 94,000 employees will meet an touch on from the wage hike, or how much it will cost Charter.

Lease saw a large do good from the changes in the tax code during the quaternary quarter, recording a $ix.3 billion non-cash do good from the adjustment of its deferred taxes. Charter isn't planning to increase its majuscule spending despite the new tax incentives to do so. It's also planning to reduce its share buyback activity in 2018. And then, it looks like Lease expects to pocket most of its tax savings.

Too READ: What to Expect From Lease Communications Inc. in 2018

Source: Chipotle

13. Chipotle

Chipotle Mexican Grill (NYSE: CMG) announced that its hourly store employees will be eligible for a $250 bonus and shop managers are eligible for a $ane,000 bonus. Some staff members received stock grants. Chipotle is also expanding its benefits program including parental get out, short-term disability insurance, and life insurance, to its hourly restaurant managers.

Management said the new tax code will save the visitor between $40 million and $50 million. Employees volition receive well-nigh one-third of those savings in bonuses and improved benefits, but the balance will go toward improving its existing restaurants. Information technology plans to spend $fifty million -- about $20,000 per store -- upgrading its dining feel.

Source: Cigna

fourteen. Cigna

Cigna (NYSE: CI) increased its minimum starting bacon to $16 per hour at the end of Jan. At the aforementioned time, information technology increased its 401(grand) lucifer past an additional percentage point. The two moves will cost the visitor about $45 meg per year.

Cigna investors saw a net tax benefit of $221 meg in the fourth quarter due to a reduction in the visitor'due south deferred tax liability, which was partially offset past the mandatory tax on foreign cash. Direction expects its constructive tax charge per unit to drop to 24% to 25% this year, which is a massive improvement over the effective taxation rate of effectually 38% the company saw in the last few years. Based on earnings before income taxes of around $iii.three billion, Cigna could save around $350 meg per year.

Source: Comcast

xv. Comcast

Comcast (NASDAQ: CMCSA) announced special one-time $1,000 bonuses for over 100,000 employees just later on the new revenue enhancement nib passed.

Management too said it would spend over $50 billion in the next five years to improve its cable communications and theme parks businesses. It's worth noting, however, Comcast's capex run rate had already climbed to a higher place $10 billion per year when it announced those plans, so it's not clear the new tax police had whatsoever impact on Comcast'south spending plans.

Like many companies a lot of Comcast'southward taxation savings are going to investors in the course of dividends and buybacks. The visitor announced a 21% increase to its dividend in the first quarter, totaling about $600 meg in payments. It as well expects to buy back at least another $five billion in shares this yr. That'southward a bit more than than the $100 million it gave employees.

Source: CVS

16. CVS

CVS (NYSE: CVS) announced an increment to its minimum wage from $9 per hr to $eleven per hour starting in April. The company besides said it's giving raises to many shop workers and pharmacy technicians that are already making more than that. It's extending parental leave to iv weeks with 100% compensation, and its increasing its health insurance premium subsidies for employees. Overall, management expects the moves to cost $425 1000000 annually.

CVS said it expects to relieve $1.2 billion this year due to changes in the tax code. It expects to spend at least half of that windfall on reducing its debt burden, and it's allocated $275 million to strategic investments. Dissimilar many companies, CVS didn't announce whatsoever plans to increase its dividend or share repurchase say-so equally a effect of the tax cuts.

Too READ: Is CVS Health Corporation a Buy?

Source: Notice

17. Detect

xv,000 Discover Fiscal (NYSE: DFS) employees volition receive a $one,000 bonus this twelvemonth thanks to the tax savings the company will see from the new tax lawmaking. Well-nigh seven,000 of those employees will see a pay raise to the company's new minimum starting wage of $15.25. Management says 25% of its taxation savings will go toward investing in its employees.

The other 3 quarters volition go toward investing in growth, primarily through increased marketing. Observe actually stands to benefit in two ways from tax cuts. It will see a lower corporate tax rate like all other companies, but lower personal income revenue enhancement rates could allow customers to service more of their debts, reducing unpaid bills and defaults.

Source: Disney

18. Disney

Disney (NYSE: DIS) paid out $i,000 bonuses to 125,000 eligible employees this twelvemonth with some of its savings from tax reform. It's too investing some other $50 1000000 in its education program for employees. That'south a total of $175 million in bonuses and benefits.

Disney has come under fire, however, as one of the requirements to receive the bonus is for union workers to agree to Disney's latest contract offer. Some say this might amount to a bribe and unfair labor practices.

Disney stands to benefit from the accelerated depreciation schedule in the new tax code every bit information technology invests in new attractions at its theme parks. It also benefits from the lower repatriation tax charge per unit, and it was able to generate a cyberspace taxation do good of $ane.6 billion in the fourth quarter from a reduction in its deferred taxes, which it now expects to pay a lower tax charge per unit on.

Source: Getty Images

19. Express Scripts

Limited Scripts (NASDAQ: ESRX) is giving employees a ane-fourth dimension bonus between $500 and $2,000 based on tenure with the company. The average bonus amount is $1,200, according to the visitor. Express Scripts is also creating a $30 one thousand thousand education fund for employees' children to fund higher and vocational training. In total, Express Scripts is investing an additional $l 1000000 in its employees.

Express Scripts recorded a $1.4 billion reduction in its deferred revenue enhancement liability in the fourth quarter, equally information technology at present expects to pay a lower tax charge per unit on that income. In the first quarter this year, the visitor saw its income tax provision decline from $364.9 million to $193.vii million. It had an effective taxation charge per unit of but 23.half-dozen% versus 39.ix% last year.

Source: Home Depot

21. Domicile Depot

Home Depot (NYSE: Hd) paid out greenbacks bonuses to hourly workers ranging from $200 to $1,000 based on tenure. Those with twenty-plus years at the visitor received the full $1,000; those with less than two years, received just $200.

Management expects the changes in the tax law to increment its cash flow by $ane.8 billion in 2018. It's also pulling forward uppercase investments into 2018 as a issue of the increased cash flow and the new revenue enhancement benefits allowing companies to deduct capital letter expenses immediately instead of depreciating them over time.

Source: JetBlue

22. JetBlue

JetBlue Airways(NASDAQ: JBLU) paid $i,000 bonuses to its 21,217 employees in February this year for a total of $21.2 one thousand thousand.

Meanwhile, JetBlue stands to be one of the biggest beneficiaries of tax reform. Direction expects its effective tax charge per unit to fall from 38% in 2017 to 24% to 26% this year. As a growing airline, it can benefit from the ability to immediately deduct capital expenditures. The provision could, in fact, reduce its cash tax bill to $0 starting this year and for the next five years. For reference, it paid $139 one thousand thousand in taxes last yr and $173 million in 2016. That's a lot more than than the $21 1000000 it gave employees.

Source: Chase

23. JPMorgan

JPMorganHunt (NYSE: JPM) increased its hourly wages an average of ten% with new minimum wages ranging from $15 to $18 per hour (depending on location) for 22,000 employees. The bank previously paid employees $12 to $16.50 per hour to start. Information technology'due south also reducing medical plan deductibles past $750 for employees making less than $lx,000 per year.

In January, the company outlined a $twenty billion v-year investment programme additional past the savings from the new tax lawmaking. The plan aims to support employees through wage increase, expand its network of Chase depository financial institution branches by opening 400 new locations, increase its charitable giving past 40%, increase pocket-sized business lending by 20% to $four billion over 3 years, and accelerate affordable housing lending.

JPMorgan will take to pay virtually $2.4 billion on the mandatory tax on international cash, merely information technology expects a 10 percentage point reduction on its effective tax rate over the next few years. With around $36 billion in income before income tax expenses last yr, that'southward around $3.6 billion in annual tax savings.

Source: Getty Images

24. Kroger

Kroger (NYSE: KR) management said information technology wants to exercise more than a erstwhile award to its employees similar many of its competitors offered in the wake of tax reform. Instead, it'due south investing in ongoing benefits such as increased 401(k) matches, higher wages, enhanced educational opportunities, increased employee support programs, and larger employee discounts. In Apr, information technology increased its 401(k) match to 5% from iv% and increased starting wages to $11 per 60 minutes to compete with other retailers.

Kroger said only about i-third of tax savings will cease upwardly in shareholders' pockets via cyberspace earnings. The residue volition go toward its Restock Kroger initiative to improve the customer experience with technology, expand partnerships, develop talent (with things like improved employee benefits outlined in a higher place), and increase Kroger'south social impact.

Kroger saw an immediate benefit of $922 million in reduced revenue enhancement liability after the new tax police force passed due to remeasuring its deferred taxation liability at the new lower rate.  Kroger may also benefit from higher discretionary spending from families with more cash in their pockets following the tax cuts.

Likewise READ: Kroger Goes on a Hiring Spree

Source: Lowe's

25. Lowe's

Lowe's (NYSE: Depression) paid out a variable bonus ranging from $75 for part-fourth dimension workers with less than ii years' feel upwards to $1,000 for total-time employees with 20-plus years of service. A total of 260,000 employees received a bonus of some amount. Lowe's as well extended maternal get out to 10 weeks, paternal go out to two weeks, introduced a $5,000 child adoption do good, and reduced the eligibility period for wellness insurance enrollment to thirty days.

While Lowe'due south saw a small negative impact from tax reform in the fourth quarter last year, direction expects to benefit to the tune of $750 million in 2018. It will use most of the additional greenbacks to fund increased capital spending, investing particularly in the omni-aqueduct retail experience.

Source: Marriott

26. Marriott

Marriott International (NASDAQ: MAR) is giving employees a special 401(m) match this twelvemonth every bit a issue of its recent cash windfalls, including tax savings from changes in the revenue enhancement code. Employees volition receive a 5-to-1 lucifer upwardly to $1,000 in their retirement plans this year. The bonus will cost Marriott an additional $140 meg, according to management.

Tax cuts will lower Marriott's effective taxation rate 8 percentage points, resulting in a savings of about $200 meg this yr. Marriott will have pregnant cash taxes this year as a effect of its sale of Avendra besides as the mandatory repatriation taxation. In the long run, the international company will see meaning benefits from the lower repatriation rate as well as the lower U.S. corporate tax rate.

Source: Mastercard

27. Mastercard

Mastercard (NYSE: MA) announced an increase in its employer match to its defined-contribution retirement plan during its fourth quarter earnings results. The visitor volition now friction match 5% of employees' salary on a 2-to-1 basis. Considering Mastercard paid out $84 million in 401(grand) matches in 2017, that could amount to about $55 million in additional employee compensation per twelvemonth.

Mastercard stands to benefit quite a chip from the revenue enhancement code changes. While it paid an boosted $873 meg in taxes in the fourth quarter last year, that was primarily due to its decision to have the tax striking on its overseas cash. The new tax law allows Mastercard to repatriate that greenbacks at significantly lower rates (15.5% versus 35%). It will too benefit from the overall lower corporate tax rate, after paying an effective rate of 26.8% in 2017 and 28.1% in 2016.

Source: PepsiCo

28. PepsiCo

PepsiCo (NASDAQ: PEP) announced plans to pay out bonuses of upwardly to $one,000 to its total-time front-line U.S.-based associates during its quaternary quarter earnings call. It also said it plans to invest in employee training around the world.

Pepsi recorded a $2.5 billion tax expense in the 4th quarter as a result of the new mandatory tax on overseas cash. Only since it has significant overseas operations, Pepsi will see a significant do good from the lower repatriation tax rate. It besides expects to benefit from the lower U.South. corporate taxation charge per unit. It's accelerating its capital spending this year, and it'due south increasing its dividend and buyback likewise.

As well READ: Why PepsiCo Has Turned Cautious on Growth

Source: PNC

29. PNC Financial

PNC (NYSE: PNC) gave $ane,000 cash bonuses to about 47,500 employees in the first quarter. It's also adding $i,500 to their pension accounts. Past the terminate of the year, PNC will institute a $15 per hr minimum wage, matching like increases from other banks. Information technology'due south too donating $200 meg to the PNC Foundation to support early babyhood education.

PNC has already seen a substantial benefit from the changes to the taxation code. It reduced its deferred revenue enhancement liability past $i.2 billion in the fourth quarter, primarily related to its investment in BlackRock. Management expects an effective taxation rate of 17% this year compared to 24.one% in 2016. That could provide a do good of betwixt $350 million and $400 million based on historical income before taxes.

Source: Southwest Airlines

30. Southwest Airlines

Both full-time and function-timeSouthwest Airlines (NYSE: LUV) employees received a cash bonus of $1,000 on Jan. 8. Those bonuses totaled approximately $70 million.

Southwest's effective 2017 tax rate (excluding changes fabricated in the fourth quarter) was 36%. Management expects that number to come up down to between 23% and 23.five% this year, saving information technology "hundreds of millions." Additionally, the company is increasing its planned uppercase spending, exercising some options withBoeing to update its fleet, and revising its 2019 and 2020 schedule with the supplier.

Source: Starbucks

31. Starbucks

Starbucks (NASDAQ: SBUX) is investing a significant amount back into its employees. Each retail employee received a $500 stock grant in April and store managers received a $2,000 stock grant. Additionally, employees received a second wage increase on top of regular wage increases that come in January. It'southward also increasing ill fourth dimension and parental get out benefits. The combined worth of the bonuses and boosted wages is $220 1000000.

Starbucks has historically spent a lot on keeping its employees happy and providing swell benefits, so it'due south non a large surprise it'south investing a lot of its tax savings in its workers.

Starbucks could save $425 million annually due to tax changes, according to Credit Suisse analyst Jason W. On the other hand, Starbucks may face higher taxes from Seattle, where its headquarters is located, under a proposed employee-hours tax. Dissimilar other companies, Starbucks didn't make whatever changes to its capital returns program, which was already a significant corporeality -- a $xv billion authorization over 3 years at the time the tax bill passed.

Source: U-Haul

32. U-Haul

Amerco (NYSE: UHAL), the parent company of U-Booty, gave out bonuses of $1,200 for total-time employees and $500 for office-time employees. In all, 28,940 employees received bonuses totaling $23.half-dozen meg.

Amerco stands to save $sixty one thousand thousand annually from the tax cuts, and information technology plans to invest $200 million total in personnel, tools, and facilities over the coming years. (How much of that is from taxation cutting benefits, and the timeline to deploy that capital is unclear.) Management expects to see its effective tax charge per unit fall 10 pct points during the next financial year. And due to taxation payments fabricated before the new tax law was enacted, it doesn't expect to pay any cash taxes for the next five quarters.

ALSO READ: U-Haul Parent Amerco's Profitability Slides

Source: Verizon Communications

33. Verizon

Verizon (NYSE: VZ) employees, other than top management, received 50 shares of restricted stock at the start of the yr. That's worth nearly $2,500 per employee, and totals about $400 1000000. Verizon, however, doesn't programme on spending much of the greenbacks it'south going to salve due to the changes in the taxation construction.

Verizon expects the changes to result in an additional $three.five billion to $4 billion in operational cash flow. Instead of investing more of that coin in building out its network and hiring more workers, like the Trump administration had hoped, it'south going to pocket the cash and strengthen its balance sheet, which holds a lot of debt. Verizon, similar all capital-intensive telecoms, will still see a large benefit from the ability to deduct capital spending immediately instead of depreciating assets over time.

Source: Visa

34. Visa

Visa (NYSE: V) is increasing its 401(thousand) friction match for employees from iii% to 5%. Visa, actually matches its employees 401(k) contributions ii-to-ane, so that's like a 4% pay bump for employees that can get the full match. Considering Visa paid out $58 million in 401(k) contributions terminal year, it might expect an increment of near $40 million annually due to the increased benefit. It's one of the more generous employee bonuses in the wake of revenue enhancement reform.

Visa holds a significant amount of cash overseas, and benefits from the lower repatriation tax in the new taxation police force. Information technology will pay $1.1 billion over the next 8 years to repatriate its cash, only that'south well-nigh one-half of what it was expecting to pay prior to taxation reform. That $1.i billion one-time revenue enhancement benefit is on elevation of the revenue enhancement benefits Visa will gain from the ongoing lower corporate tax rate. Information technology'due south no wonder it has room to offer a generous boost to its employee benefits.

Source: Walmart

35. Walmart

Walmart (NYSE: WMT) announced an increment in the starting wage for its employees from $10 per hr to $11 per hour back in Jan. Those employees that weren't impacted by the increased starting wage received a bonus between $200 and $1,000 based on tenure. Management likewise extended parental exit to 10-weeks for maternal and half-dozen weeks for paternal, likewise as a pledge to contribute upward to $5,000 to the price of adopting a child. Many have pointed out Walmart may have raised wages even without the taxation cuts in an effort to increase employer retention.

Walmart's wage increase will cost it almost $300 million annually. The bonuses will add another $400 million. But Walmart stands to benefit a lot more than from the lower corporate taxation rate. Walmart had an effective tax charge per unit of 30.iv% in financial 2018 and 30.three% in 2017, and could run across a pregnant drib this yr with the new 21% corporate tax charge per unit. Considering it had a tax bill of $iv.6 billion last year and $6 billion the yr before, information technology could effect in substantial savings.

Besides READ: Why the Bears Are Wrong About Walmart

Source: Waste Management

36. Waste Management

Waste matter Management (NYSE: WM) employees who aren't in a bonus or incentive plan, nearly 34,000 employees in total, received a $2,000 greenbacks bonus this yr.

Direction said it expects to save about $275 million this year due to changes in the taxation code. Well-nigh $70 one thousand thousand of that will go to the employee bonuses, and another $150 1000000 will go toward refreshing the truck fleet and other uppercase expenses. Waste material Management stands to further benefit from the increased capital spending due to the new accelerated depreciation schedule in the new tax lawmaking.

The visitor is also going to use some of its taxation savings to become more aggressive with mergers and acquisitions. Information technology typically spends between $100 million and $200 million per yr on acquisitions, but that number could climb in lite of tax reform.

Source: Wells Fargo

37. Wells Fargo

Wells Fargo (NYSE: WFC) smartly avoided paying out bonuses to its employees in the wake of tax reform. The company has a murky history with employee bonuses. Instead, it increased the minimum wage to $15 per hour, pushing competing banks to do the same. It's unclear whether that pay raise is linked to the tax cuts equally Wells Fargo's press team has issued conflicting reports. Wells Fargo is besides planning to donate $400 meg to nonprofits this yr.

Wells Fargo stands to benefit from the fourteen percentage signal subtract in the U.South. corporate taxation rate more than well-nigh other companies. Nearly all of its operations accept identify in the U.S. Every bit a issue, its effective tax rate could autumn to virtually 22% this year, according to Goldman Sachs analysts, down from 33% last year. That would result in nearly $3.seven billion in taxation savings. Fifty-fifty with a $1 billion fine hanging over its head, Wells Fargo is making out quite well from tax reform.

Source: Getty Images

Companies will nonetheless come out ahead

There are many more companies that offered wage increases, bonuses, and other employee benefits in the wake of tax reform. Over 400 companies have announced plans to laissez passer on some of their savings to employees in some form, with 4 one thousand thousand-plus workers receiving over $4 billion in bonuses, according to the GOP.

Corporations should withal come out well ahead even after paying out employee bonuses. The corporate tax cuts are permanent, and most companies opted to pay a relatively small one-time bonus compared to the benefits they'll run into this year lone. Information technology's also unclear if the wage and benefits plan increases are more closely tied to the tax cuts or a booming job market place where companies are forced to compete more aggressively for labor.

American workers are seeing more money in their pockets this yr, but they need to save that money considering it's likely a sometime bonus and the personal income tax cuts aren't permanent.

Adam Levy owns shares of Apple tree, Express Scripts, Lowe's, and Starbucks. The Motley Fool owns shares of and recommends Anheuser-Busch InBev NV, Apple, CarMax, Chipotle Mexican Grill, Mastercard, Starbucks, and Walt Disney. The Motley Fool owns shares of Verizon Communications and Visa and has the following options: long January 2020 $150 calls on Apple, curt January 2020 $155 calls on Apple, short September 2018 $180 calls on Home Depot, and long Jan 2020 $110 calls on Dwelling Depot. The Motley Fool recommends Aflac, Amerco, CVS Health, FedEx, Home Depot, JetBlue Airways, and Marriott International. The Motley Fool has a disclosure policy.

Is Repunlic Services Giving Bonus For Tax Break,

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