A bonus is a form of compensation paid in addition to regular wages or salaries. It is commonly given as a reward for work that has been completed above and beyond expectations or on account of superior performance. Bonuses may be specified in an employee’s contract or determined by the employer on a case-by-case basis.
Employers often give bonuses at the end of the year, especially to employees who have met or exceeded their goals. Bonuses can also be given special rewards, such as Christmas bonuses or bonuses tied to company milestones or anniversaries.
A minimum bonus and maximum bonus is an amount of money that an employer must pay to an employee as a bonus. The bonus must be at least 8.33% of the employee’s salary, and it can be up to 20% of the salary. Employers often use minimum bonuses as a way to attract and retain employees.
A performance bonus is an additional payment, over and above a worker’s regular wage or salary, made to employees in recognition of outstanding work or exceptional individual achievements.
Generally, there are two performance bonuses for employees: individual and team. An individual performance bonus is paid to an employee to recognize outstanding work or exceptional individual achievement. A team performance bonus is paid to a team to recognize outstanding teamwork or exceptional team achievement.
An incentive bonus is a type of bonus paid to employees in addition to their regular salary or wages.
An incentive bonus aims to motivate employees to achieve specific goals or objectives. Depending on the terms of the bonus plan, employees may be rewarded for meeting specific performance goals, reaching predetermined targets, or outperforming their peers.