Motivations aren't entirely clear because both characters, but especially Winslow, through whom we see the story, are unreliable narrators. My thought was that Thomas was insane the whole time, possibly from cabin fever or from whatever the light was.

Winslow appeared to go down the sanity slope over the course of the film, and as such, it's hard to say exactly what happened and what didn't. Thomas may have cut his pay simply because he was an insane dick. Winslow probably didn't tell him about the mermaid because, how often do you tell your masturbation fantasies?

The lighthouse itself is also kind of symbolic. It's supposed to alert people of danger, but in this case, it's subverted, and drew men to their dooms like a siren.