How Much Is a Typical Employee Christmas Bonus?

How Much Is a Typical Employee Christmas Bonus?

How Much Is a Typical Employee Christmas Bonus?

The amount an employee can expect to receive as a Christmas bonus varies. Holiday bonuses are not given by every company, but bonuses are known as a tradition in the financial industry.

In the business world, it has become difficult to find a company that consistently gives its employees holiday bonuses. Small businesses are less likely to award a holiday bonus because they are more vulnerable to consumer buying patterns and fluctuating economic markets. As the fiscal year ends, a small business may find it necessary to tighten its belt, especially when it comes to holiday perks for its employees. It's important to keep in mind, however, that a holiday bonus and a year-end incentive are not the same thing.

A 2016 Bank of America survey found that 32 percent of businesses planned to give bonuses as compared to 52 percent in 2015, while 28 percent had no plans to offer its employees holiday perks. However, if a company does choose to gift its employees, there are several ways for it to do so.

A Monetary Bonus

A company may offer its employees an end-of-the-year bonus that is generally equivalent to 10 to 20 percent of their annual salary. A 2016 survey of Business Know-How with readers who are business owners, found that 75 percent of companies with 100 or less employees planned on giving cash bonuses. Depending on the business and its profitability, an employee can expect a cash bonus between $50 and $5,000, with the medium bonus being $300. An October 2016 Accounting Principles survey of large and small businesses indicated that three percent of employers planned to give cash bonuses to employees in a range from $100 to $499, while 50 percent indicated that $500 or more was their goal.

For salaried employees, an employer may calculate the annual bonus based on a percentage of a worker's base salary, but the percentages vary from business to business. In the Business Know-How survey, the lowest percentage was one percent of the annual salary, the approximate equivalent of a half-week's salary, and the highest was 10 percent or more. The most common bonus award was equivalent to one or two weeks salary for full-time employees.

A Performance-based Bonus

An employer may offer its staff a performance-based bonus in lieu of a holiday bonus. The intent of this type of bonus is to motivate them at the end of the year in order to reach the company's year-end fiscal goals. Some companies give incentive bonuses instead of a holiday bonus, but this practice can cause high levels of dissatisfaction among the workforce. As a rule, however, many employers separate pay-for-performance bonuses from holiday bonuses, with the second being a thoughtful gesture of gratitude and appreciation.

A Non-cash Gift

More than 43 percent of the businesses surveyed by Business Know-How indicated that they planned to give their employees non-cash gifts or other perks during the holiday season. According to employees surveyed by Inc.com, the most appreciated non-cash gifts include:

  • Gift cards to grocery and department or online stores
  • Paid time off
  • Company clothing or stadium blankets with logo
  • Hampers filled with items they would not purchase for themselves such as organic juice or luxury chocolates
  • Holiday party