That season of giving will soon be upon us. Many employers choose to use that time to show their appreciation to their employees. And some offer monetary thanks, which is why we are jumping into the topic of holiday bonus versus year-end bonus. Oh, and if you want to offer non-monetary bonuses, we’ve got you covered there, too.
First, let’s make a case for why this showing of appreciation matters. Simply put, they boost morale and keep your team motivated during the holiday season. Need we say more?
Now, let’s get to the good stuff, helping you understand the distinction between a holiday and year-end bonus.
Holiday bonuses are generally given to employees in addition to their regular paychecks. They are typically a percentage of an employee's salary, and the amount varies depending on your budget and the employee's position and length of service. Holiday bonuses are usually given out close to the holiday season, and some companies decide to distribute them as early as November.
Year-end bonuses, on the other hand, are given to employees as a lump sum, usually after your fiscal year has ended. The amount of a year-end bonus is also based on your budget and the employee's position and length of service, but it is often higher than a holiday bonus. Due to the calculation and accounting calendar for most businesses, year-end bonuses are typically given out in December or January.
Deciding Between Holiday and Year-End Bonuses
So, which type of bonus is better for employees? That depends on a number of factors, including your financial situation, the employee's needs and the timing of the bonus.
If the company is doing well financially, a holiday bonus may be a better way to show appreciation to employees and to motivate them to stay with you. On the other hand, if the company is struggling financially, a year-end bonus may be a more prudent choice.
Whatever you decide, remember two important points: (1) You should always communicate with your employees ahead of time as to what you plan to do by way of their bonus and recognition—it will keep them more engaged during the stressful time of year. (2) Both bonus options are taxable, so get with your accountant and tax preparer to make sure you are properly classifying the funds on your employees paychecks.
What if you want to give a gift, something tangible perhaps, or something that can be enjoyed, and we’re not talking cash anymore? Non-monetary gifts are a great option in these cases and often are more appreciated than cash bonuses. Why? Non-monetary gifts show that you’ve thought about the employee and what they would really appreciate. Non-monetary gifts also tend to be more memorable than cash. So, if you’re looking for a way to really show your appreciation for your employees this holiday season, consider giving them a non-monetary gift.
Some great non-monetary gift ideas include gift cards, tickets to a show or event, a basket of fruit or other goodies, a gift certificate for a day of pampering, or a subscription to a magazine or online service. Another option may be to grant your employees with extra time off, particularly around the stress-heavy holiday season, if you can manage the workload around a few absences.
Whatever you decide to give, make sure it’s something that the recipient will appreciate and will remember with fondness. A thoughtfully chosen non-monetary gift can go a long way in showing your employees how much you appreciate their hard work and dedication to you and your business.
Get Help From a Florida Employment Lawyer
Deciding the proper bonus structure to give your employees for the holiday season can be confusing. Employers should be prepared to seek support from their legal counsel. If you have any specific questions or concerns about issuing employees holiday bonuses or year-end bonuses, contact an experienced Florida employment law attorney for immediate assistance.