27 Nov Employee Holiday Bonuses
Who keeps your business moving? Who is the face of your business to the public? Your employees represent you, work hard for you (at least we hope they do) and keep things moving. During the holidays it is important to acknowledge their hard work and dedication. Holiday bonuses and gifts are the most common way to acknowledge that hard work and dedication. In a survey going back as far as 2006 an average of only 47% of small businesses give Christmas or holiday bonuses.
If you choose to do cash bonuses there are a few things you should know. With bonuses comes some etiquette as well as some common sense. Holiday bonuses can both be a great motivator as well as a big disappointment.
- First evaluate if you can afford to give a bonus. Has your gross margin increased and are you on target financially? If so cash is an option.
- Give fairly and evenly. If you do for some you should do for all. Don’t kid yourself and think that employees don’t talk.
- There was once a time that a weeks wages was considered a fair holiday bonus. You can consider basing your holiday giving on daily or weekly pay.
- Be sure to run your bonus through payroll. Bonuses are taxable income.
- Check with your payroll provider to see when the holiday additional pay cut off for their service is. Some providers need to accommodate hundreds of special pays and can’t do it in the last payroll of the year due to tax filing cut offs.
If you can’t afford cash bonuses consider the gift of time. Additional paid or unpaid time off can also be a great reward. Things like gym memberships and event tickets can also be great gifts. At a bear minimum be sure to remember a card with a personal note. I also like to be consistent when I give my holiday bonus. The first payroll after Thanksgiving is my personal favorite time to give my bonuses. This way employees have a little additional cash to help with holiday expenses.
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