Holiday bonuses act as a token of appreciation from business owners to their employees. Besides appreciation, employees also like receiving additional gifts and cash.
A holiday bonus can make your employee feel supported and valued. It often leads to increased productivity and employee engagement.
You, as a business owner, can provide several kinds of holiday bonuses to lift your employee’s morale!
What are the Types of Holiday Bonuses?
Among the different kinds of holiday bonuses presently in practice, the most prevalent ones are listed below.
1) Cash Bonuses
Employees always appreciate additional cash during the holidays. This cash bonus helps them cover the extra expenses incurred during the holidays. Some employees also rely on these cash bonuses to clear their bills.
Few organizations provide a flat bonus amount to each and every employee. On the other hand, some business owners provide a cash bonus equivalent to a percentage of the employee’s salary and profit of the company in that year.
2) Performance-based Bonuses
Some organizations give out performance-based bonuses to their employees. These bonuses can be provided in addition to or instead of holiday bonuses.
In this case, companies tie these bonuses to how employees meet or exceed the business goals in that year. Sometimes, performance-based bonuses also reflect the tenure and position of the employees.
3) Cashless Gifts
Some business owners cannot give out cash gifts to their employees. Instead, they offer non-cash gifts such as flexible working hours and extra time-offs.
Cashless gifts also include gift cards to restaurants and movie theaters. Some companies also opt for branded merchandise as non-cash gifts.
A Few Holiday Bonus Tips for Business Owners
As a business owner, you should first evaluate the current situation of your company. You should give out a holiday bonus only if you can afford it.
If your company has a record of giving out cash bonuses every year but cannot afford it this year, you should try to notify all your employees at the earliest. This action can help prevent or minimize negativity among the employees later on.
Some important tips for business owners regarding holiday bonuses are listed below.
1) Fair Bonus Amount
You should always be careful while choosing the holiday bonus amount. It needs to be fairly and equitably distributed in an unbiased manner. In addition, you need to ensure that no employee feels unfairly treated.
2) Complete Inclusion
You need to make sure that all your employees get appreciated in some way. No employee working for your company should feel left out.
3) Gift of Time
As a business owner, you can consider giving your employees the gift of time if you cannot afford cash bonuses. Paid time-off can help your employees spend more time with their families and loved ones. More breaks can also help them relax during the holidays.
A holiday bonus, like any other bonus, is taxable. Based on the agreement with the employee, some business owners choose to pay a holiday bonus along with the tax amount.
So, as a business owner, you need to report this bonus as taxable income in the concerned departments. However, if you are a small business owner or simply lack the required resources or infrastructure to carry out these duties, managing these things can be a hectic job.
In this case, you can reach out to Professional Employer Organizations (PEO). PEOs can perform these duties on your behalf.
Nowadays, PEOs handle payroll, employee benefits administration, tax filing, recruitment, and much more. So, if you are interested, feel free to contact us now and appoint the best in the industry. Find out more on this in our blogs!
Contact Us
Find out if a PEO is the right solution for your business.
Fill out the form below and we will contact you to schedule a chat.
