Company Bonus Scheme

Lyndan

Hi there,

I am implementing a new bonus scheme in my small company of 7 people. Wondering if anyone had any guidelines or a template that I could use as a starting point?

Thanks
Lynn

iMax

If it were me (& hopefully it will be at some point), I'd do a profit share, a percentage of profit of the company going to the staff for a year end bonus.

That way the better the company performs (& everyone in the company), the more profit there is to share. If the company doesn't perform, then no profit.

dbran

+1

Also some fair and agreed measure of performance for each staff member such as chargable hours billed, or total sales, invoices raised etc.

Remember that a bonus will be seen as part of the salary if it is not appropriately earned.

Hope this helps

dbran

iMax

dbran wrote: »

+1

Also some fair and agreed measure of performance for each staff member such as chargable hours billed, or total sales, invoices raised etc.

Remember that a bonus will be seen as part of the salary if it is not appropriately earned.

On that.

From dictionary.com:

bo·nus   
[boh-nuhs]
–noun, plural -nus·es.

1. something given or paid over and above what is due.
   
2. a sum of money granted or given to an employee, a returned soldier, etc., in addition to regular pay, usually in appreciation for work done, length of service, accumulated favors, etc.
   
3. something free, as an extra dividend, given by a corporation to a purchaser of its securities.
   
4. a premium paid for a loan, contract, etc.
   
5. something extra or additional given freely: Every purchaser of a pound of coffee received a box of cookies as a bonus.

Gloomtastic!

I was just thinking about this last week.

How does profit share work tax-wise for the company? Is the bonus a business expense and therefore taken off the bottom line or is the company liable for tax on all of the profit and then the remainder distributed to the employees (who are then liable for income tax on it regardless).

dbran

Hi

A bonus would be treated just the same as a regular salary. A deductable expense but liable to PAYE/PRSI/USC.

Kind Regards

dbran