Updated: 7th March 2025
Updated: 7th March 2025
During high stress and peak periods in the workplace, employers may wish to find ways to show their appreciation for their employees’ hard work.
However, firm-wide or company bonuses are usually contractual and tend to be paid out once specific targets are hit. This means an employer has less flexibility around how much or who is entitled to one. Employees’ entitlement to a contractual bonus should be recorded in their written statement of employment particulars and the criteria for the employee to obtain a contractual bonus should be clearly explained and set out.
Discretionary bonuses are sometimes known as voluntary bonuses or non-contractual bonuses. A discretionary bonus provides much more flexibility for an employer as it provides the option of potentially granting a bonus one year, but not necessarily the next year, and setting the amount to reflect current conditions. This means it could be used to provide financial support quickly and discreetly, should the need arise.
If a contract says a bonus is discretionary, the employer must still act fairly when deciding whether to pay it. If the employer does not act fairly and reasonably then they may leave themselves open to legal claims.
Discretionary bonuses might go a long way to help struggling employees, however, they are not the only method of assistance available. Employers may wish to consider other options available, such as providing short-term crisis loans that could then be paid back through salary deductions over a set period of time.
Another option is to explore whether any reasonable salary increases can be made. However, for businesses which are unable to provide salary increases, a one-time discretionary bonus could seem like the best way forward.
It is important for employers to seek professional advice, where necessary, to ensure that they have addressed factors such as fairness, unconscious bias and how to ensure the support will remain confidential before they go ahead and set up any discretionary bonus schemes.
Yes, typically bonuses are considered taxable income. Certain types of gifts, such as non-cash items below a specific value threshold, may not be taxable, depending on the tax laws in each country. Employers should consult tax professionals to understand how to handle gifts and bonuses compliantly.
Thoughtful planning helps employers show appreciation for their employees creating a fair and supportive workplace. If you have any further questions or require any assistance with managing employee bonuses and their tax implications, then reach out to a member of our team today.
While the holiday season brings festive cheer and a chance to celebrate, it also comes with a unique set of challenges for employers. By addressing key issues such as managing seasonal workers’ rights, holiday pay entitlements, flexible working arrangements, and employee wellbeing, employers can navigate the festive period with ease and compliance. Offering support through clear communication, fair policies, and inclusivity ensures a positive and productive holiday season for both employees and employers alike. By remaining proactive and understanding, businesses can create a workplace culture that is festive, fair, and respectful of the diverse needs of their workforce.
For a large majority of businesses, particularly those in retail, the holiday season may mean acquiring additional support through seasonal workers. We explore the rights seasonal workers have and address other key questions on the topic.
Flexible working, especially during Christmas, can help balance business demands with personal challenges. We explore strategies for managing flexible working requests and policies.
Flexible working, especially during Christmas, can help balance business demands with personal challenges. We explore strategies for managing flexible working requests and policies.
At this time of year, Christmas bonuses are a key topic of conversation within employment. We explore the types of bonuses and tax implications for your business to consider.
Managing employee absences, particularly over the holidays, can make things difficult. We discuss what can be done regarding non-genuine absences and how to balance this with business needs.
To avoid grievances over holiday rotas, employers should set clear expectations with staff surrounding holiday cover, time off around the holidays and any additional over-time needed to support the business. However, if a grievance does arise, we set out the steps to consider to ensure it is handled with care.
Supporting employee wellbeing during the holiday season is crucial, as this time can bring increased stress, especially for working parents juggling childcare and work responsibilities. We highlight the ways employers can effectively support their employees to foster a positive and productive workplace culture.
We explore ways to maintain an inclusive culture at Christmas, focusing on respecting diverse religious beliefs and promoting a supportive and cohesive workplace environment.
While the buzz around Christmas heightens, there is no denying that the winter months can make getting to work difficult for those who need to travel. We share the key considerations for employers during this time.
Over the holiday season, many businesses see an increase in remote work. With employees logging in from various locations and devices, we share the key steps to protect your business’s security during this season.
Over the holiday season employees are increasingly eager to spend time with loved ones and often travel to make the most of the festive break. We share how employers can balance this with the business needs effectively to help the business run smoothly and enhance employee morale.
The Christmas period can be an excellent time for workplaces to relax and employees to have fun. However, with social events like office parties, the blurring of personal and professional can present some unique HR problems. We provide guidance to help ensure your office to get together runs smoothy.
Amy is a Solicitor within the firm’s Employment Team specialising in advising education clients including schools, academies, higher education institutions and universities.
Amy specialises in employment law and supports clients on a variety of non-contentious matters including reviewing and drafting policies, procedures, employment contracts and settlement agreements. Amy also provides support on all elements relating to the defence of Employment Tribunal claims.
Our experienced employment solicitors offer comprehensive employment law services across multiple offices, providing tailored advice for both routine and complex matters. With expertise across various sectors, including education and food and beverages, we help businesses navigate the intricacies of employment law, no matter their size or industry.