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Use this policy to detail how the employee / company bonus scheme works, including eligibility and payments.
1 Overview
1.1 The purpose of this policy is to detail company / employee bonuses.
2 Scope
2.1 This policy is applicable to all employees of [company name].
3 General principles
3.1 The objectives of [Company]'s bonus scheme are to motivate employees by rewarding additional effort or exceptional performance, and to attract and retain talented staff.
3.2 However, the scheme is entirely discretionary and does not form part of your contract of employment. The rules of the scheme may be varied from time to time at [Company]'s discretion, and [Company] reserves an absolute discretion to terminate or vary the bonus arrangements without notice at any time or to exclude employees from participating in the bonus arrangements.
3.3 The payment of a bonus to an employee in any bonus payment period is no guarantee that he/she will receive a bonus payment in the future and is no indication of the level of bonus that he/she might receive in any future bonus payment period.
4 Eligibility
[All employees] are eligible to be considered for a bonus. [Employees are not eligible for a bonus
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A bonuses policy is a document that outlines an organisation's approach to providing bonuses or incentive pay to its employees. The policy typically covers various aspects of bonuses, including eligibility, criteria for awarding bonuses, calculation methods, and payment timing.
The purpose of a bonuses policy is to provide a framework for the fair and consistent distribution of bonuses across the organisation. It helps to ensure that employees understand what is required of them to receive a bonus, and that bonuses are awarded in a transparent and objective manner.
Some common elements that may be included in a bonuses policy are:
Eligibility criteria: This outlines the specific job roles or employee groups that are eligible for bonuses, and any performance or other requirements that must be met to qualify.
Bonus calculation methods: This outlines the formulas or other methods used to determine the size of a bonus, and any factors that may be considered in the calculation (e.g. individual performance, team performance, company profitability, etc.).
Payment timing: This outlines when bonuses will be paid (e.g. annually, quarterly, etc.) and any conditions that must be met in order to receive the bonus.
Discretionary bonuses: This outlines any bonuses that may be awarded at the discretion of management, outside of the regular bonus program.
Communication: This outlines how bonuses will be communicated to employees, including any details about the bonus program that employees need to be aware of.
A well-designed bonuses policy can help to motivate employees and reinforce desired behaviours, while also providing a clear framework for the distribution of bonuses across the organisation.
Yes. This template has been designed for organisations of all sizes, including small businesses, charities and growing employers. It follows UK employment law best practice and can be adapted to suit your organisation.
Our templates are developed with UK employment legislation, Acas guidance and HR best practice in mind and are reviewed and updated as relevant requirements change. However, every employment situation is different, so the template should be adapted to the circumstances and checked against the employee's contract and your organisation's procedures before use.
Yes, we highlight the areas of the document that you need to update with your own details, and where you need to make decisions to suit your situation. This saves you time and ensures that you meet best practice.
Yes. Once purchased, you'll be able to download it instantly. Templates are provided in editable format (such as .doc or .xls) so you can customise them easily, and in PDF format for easy sharing.
If you're looking for broader support, we also offer toolkits and library bundles that include the Bonuses policy template, along with other HR templates and policies for fully managing your situation. These may be more cost-effective if you need deeper advice.
AI can produce a document quickly, but effective HR documentation needs to be more than well-written words. It needs to reflect relevant UK employment law, HR best practice, practical considerations and the circumstances in which it will be used. These resources have been professionally developed around that wider HR context, drawing on extensive practical experience, rather than simply generating a generic document from a prompt.
Darryl Horn, Chartered HR Director
Darryl is a Chartered HR professional with over 25 years' experience in senior HR and employee relations roles.
He has extensive practical experience of managing pay and benefits processes and founded hrdocbox to provide businesses with practical, professionally developed HR resources grounded in UK employment law and best practice.
"Darryl provides support and advice with excellent judgement, and has a strong understanding of people, policies and UK employment legislation."
"He is someone I trust; consistent, dependable, and committed to doing things properly."
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