A guide to different kinds of bonus

There are numerous ways in which a company can offer a bonus. There are many types of them: annual or lump sum, monetary or non-monetary, variable or fixed, etc. This article will compare many of them.

All the bonuses compared in this article have specific articles developing its description, their pros and their cons. You can find those articles here:

Sign-on bonus

Referral bonus

Retention bonus

Year-end and holiday bonus

Profit-sharing bonus

Commissions

Main characteristics

Brief bonus description

Discover TalentUp salary platform 💡

Get any salary for any location.
Real-time trustwhorty salary data.

Sign-on bonuses (also known as singing bonuses) are offered to potential employees if they accept a job offer. Its main purpose is to attract talent. They can also be offered to former workers obtaining a new role. Especially if the new role requires a change of location or a higher workload and more responsibility.

Referral bonus: payment made to a former employee for referring a candidate for employment. Referrals are the most common way for people to find new jobs.

Retention bonus: it is paid to keep a key employee on the job during a crucial business cycle or production period. This may be the case with mergers or acquisitions, leading to periods of instability. It prevents workers from leaving their positions. They are also called ERBs (employee retention bonuses), retention pay, retention packages, or a stay bonus.

Holiday bonus: it is given when the year ends equally to all employees. It represents how the year has been financially for the company.

Year-end bonus: it is given when the year ends and customized to each employee. It represents how the year has been financially for the company.

Profit-sharing bonus: it is compensation received over a set period of time, usually once a year. It represents a percentage of the company’s pre-tax profits. For this reason, the profit is only applied when the company has benefits.

Commissions: they are rewards specifically given to salespeople based on the number of sales they make. Usually, there is a base salary (which amounts to approximately 60% of pay) and commissions on top. Some companies offer all their pay in commissions if they represent a higher percentage of sales.

Target companies for each bonus

Follow TalentUp on LinkedIn and subscribe to our newsletter to get our latest articles!

Bonus

Cookie Settings

Your message has been sent.