What Is a Bonus? Definition and Types
There are many factors to consider when it comes to compensation. It is actually the first salary an employee receives. When it comes to total pay, job seekers and employees must take into account base pay, benefits, stock options, bonuses, and raises. Many occupations offer additional compensation such as overtime, on-call, special project pay, and investment options.
Collectively, bonus compensation is an additional payment beyond your hourly or base salary.
You might be wondering, “What are these other forms? How do I get them?
We are here to help. If you are a happy employee and want to know more about your current salary, If you’re speaking to a recruiter and feel overwhelmed with all the talk about numbers, Here’s a quick cheat sheet that will help you identify the most popular types of bonuses offered by top companies.
What is a Bonus?
A bonus is an additional payment to employees that goes beyond the regular salary. For exceptional performance during the year, companies may offer bonuses to employees. Sometimes, companies offer bonuses to all employees. Employers may also offer a joining bonus or a retention bonus.
Each company has its own unique bonus structure. It often depends on the business type, industry standards, and yearly performance. A sales team might be paid a commission. A larger sales office might offer a higher commission structure than a smaller one.
Types of Bonus
1. Annual Bonus
Based on an employee’s base salary, the most common bonus type is one that is paid annually. In most cases, each employee is given a target bonus that represents a bonus at the end of the year. If the manager or company determines that an employee a.k.a. The annual bonus will be paid if the manager or company determines that an employee, a.k.a. This is where the key lies: the annual bonus will be paid if the department or company achieves certain business performance results.
Like most bonuses, the amount or percentage of the annual bonus can vary among departments and positions. This is decided by the company’s HR and leadership teams.
Originally published on The Tech Trend