Bonus payment terms and conditions

Paying bonuses is an employer's way of rewarding an employee. It is bonuses that encourage workers to improve the quality of work and its volume. But this method of promotion has its own nuances, which we will talk about in the article.

The first thing to understand is the definition.

The concept

Bonus payment - monetary reward for an employee of an enterprise. This amount is charged on top of the main wage.

With the help of the award, management notes the employee who distinguished himself in his work and encourages further efforts.

The bonus system is developed by representatives of the labor and salary department or by the employee development service. After development, the enterprise management reviews the document and approves it.

The document is called the bonus provision and is an independent internal regulatory act of the organization or an annex to collective agreements. A key provision may be the basis for developing applications for bonus units.

If the employment contract provides, then you can agree on the individual payment of bonuses directly with the employer.

Typically, prizes receive:

1. Employees who are in leadership positions. They are encouraged for their common work.
2. Employees of the management apparatus. Award is paid for the common work and for the achievement of individual units. And they also receive incentives in the event that individual employees have distinguished themselves.
3. Ordinary workers. They receive payments for the overall work of the unit, which takes into account the individual results of the employee.

Types of Prizes

Paying employee bonuses is based on several elements:

1. Conditions.
2. Bonus rates.
3. The frequency of payments.
4. The size.
5. Identification of the people to whom the award is due.

In addition, there are also types of bonuses. Among which are:

1. Production. The payment of bonuses to employees is carried out for performed duties or production tasks. Such bonuses are systematic and can be paid once a month or quarterly.
2. Incentive. The type of awards that employees receive in honor of a memorable date or anniversary at the end of the year for good performance, for service, for the quality performance of their duties or because the award is approved by the bonus regulation.
3. Customized. The terms of payment of the bonus are such that it is paid to one employee of the organization.
4. Collective. Basically, these are payments for the results in work that the entire team receives. Before accrual of bonuses, the indicators of the entire department are compared, then the amount of the bonus is divided among all workers. Naturally, it depends on the salary of each employee. How much the employee excelled is determined, depending on the hours worked, the coefficient of labor participation and basic earnings.
5. Absolute. These are premiums that are paid in a certain amount.
6. Relative. The size of the amount is determined taking into account the bonus interest.
7. Systematic. This type of promotion is accrued regularly.
8. One-time. These include a bonus for some fulfilled order or assignment.
9. Are common. They are issued most often for achievements in work.
10. Special. As well as lump sums, they are awarded for some separate task.

Award Forms

All bonuses are also divided by form of payment. There are only two of them: commodity and money.

Everything is clear with money, but a commodity bonus is a material gift. For example, it can be a watch, some kind of household appliances, a certificate for a service, and more.

When the premium is paid

According to article 129 of the Labor Code of our country, the payment of bonuses to employees should be regulated by the internal document of the enterprise. That is, the bonus is not a mandatory payment, but if it is already provided, then the employee must receive it.

For example, an employer cannot deprive an employee of a bonus for misconduct. But the law does not provide for a specific plan according to which the premium should be paid. Such questions are decided by the employer.

How is the premium calculated?

If an employee receives a fixed salary for fulfilling his labor duties, then he can count on a bonus only if he fulfills the production plan or hand over some project.

Some organizations issue an order to pay bonuses only if the work plan is well executed or overfulfilled.

Collective bargaining agreements must regulate all sorts of cases where the premium is paid. All internal documents are signed by each employee, thereby agreeing to the proposed conditions.

For the head of the organization to sign an order on the payment of bonuses, he needs to provide data on the employee. Usually this is done by department heads. So, to pay the premium you need:

1. Information about the employee.
2. The specified payout amount. This can be a fixed amount or percent of salary.
3. Information about the project, as a result of which a person deserves a prize.

If the manager agrees with the candidacy and the size of the incentive, then he endorses the information. After that, the manager issues a free-form order for the payment of bonuses. The order must have the seal of the company and the signature of the head.

The accountant of the enterprise is appointed responsible for the execution. An employee should also be provided with a document for review. If the employee is happy with everything, then he will put his signature.

The prize, as a rule, is issued along with wages and under signature in the statements. After all, promotion is also part of the salary, so it must be indicated in the documents.

Bonus Calculation Algorithm

1. The head issues an order.
2. An employee’s income tax is deducted from the accrued amount.
3. The employment contract reflects cases when the bonus is accrued and its size.
4. Payments of bonuses to employees are carried out according to the list. It is signed by the head. Bonus payment is possible separately from the salary.
5. If an individual has a stable profit, then the premium is charged as a percentage. That is, the amount of salary is multiplied by the bonus percentage. From the total number, income tax is deducted.
6. If the salary depends on the output, then the amount of the salary is again multiplied by the premium interest and the income tax is taken.
7. If the premium amount is fixed, then only income tax is taken from it. All that remains is given to the employee as a reward.

Bonus Payment Order

This is an internal document that indicates the period of issue of the premium, the type of payment, as well as the general situation, the reasons for the reduction in the size of the premium.

The order is invalid without information about the specialty, department, method and principle of award. A large organization describes all the indicators. If the enterprise is small, then three points are enough.

The size of the bonus is prescribed in a special section (bonus rules). The document also indicates the person in charge and information about the rules for issuing incentives.

An additional section defines the procedure for accruing incentives for individual work performed or bonuses by a significant date.

Prize Application

The employee should not write any statements, all this is done by the head. The latter writes a memorandum (if the provision on the payment of premiums does not establish a special form) or an application for calculating the premium.

The following data shall be entered into such a document:

1. The heading of the document contains information about the manager, information about the boss submitting the form, and the position held by the latter.
2. The title indicates that this is a material incentive. And also the data of the person to whom the award is put is entered. Be sure to indicate the document - a memo or presentation.
3. The statement must necessarily include data on the merits, which are the cause of the award. The size of the incentive is also prescribed here, but this is only if the manager does not appoint the amount of payment himself.
4. Last in the application is information about the person who compiled the document.

How a one-time bonus is paid

A lump-sum bonus payment is a monetary incentive that is issued to an employee for motivation for further high-quality work. Such a bonus is not regular; therefore, it is not considered a salary. To receive a one-time bonus, it is quite profitable to distinguish yourself in your work, or it can be timed to some date or event.

One-time bonuses may be included in the settlement system of employee salaries, as well as vacation pay. Everything related to a one-time bonus is prescribed in the internal acts of the enterprise, the collective agreement.

The procedure for the payment of bonuses that do not have a regular basis is described in the following documents:

1. Contract of employment.
2. Collective agreement.
3. Provisions that govern wages in the enterprise.
4. Other internal documents.

By law, an enterprise has the right to adopt an internal document containing the rules for the payment of bonuses to employees. The main thing is that the internal document does not contradict the basic law. Such a document should cover the following issues:

1. Under what conditions is the prize issued.
2. The size of the promotion.
3. The procedure for calculating the premium.
4. How the prize is issued.
5. Persons to whom the prize is awarded.
6. From what sources will the amount for premiums be taken.

A feature of a one-time bonus is its clear calculation. A one-time bonus, like any other, is subject to income tax, because it is the income of the employee. In addition, a one-time bonus is also reflected in the accounting documentation. The size of the bonus is calculated as a percentage of wages or has a fixed amount. Only the employer decides whether or not the payment of the bonus will be approved.

In salaries they pay an annual bonus.

Annual award

If internal documents provide, then at the end of the year an annual premium is paid. So, the annual bonus is paid within fifteen days from the moment it is accrued. During this period, the employer has the right to set any bonus date.

According to the law, it can be:

1. Last calendar or business day of the ending year. And also the premium can be paid along with the salary.
2. The day after the founder accepted the internal reporting.
3. The day after the annual accounts are submitted.

In case of violation of the terms of payment of premiums, the employer is fined.

Monthly bonuses

Even by name, you can understand that such an incentive is paid every month. Bonuses must be paid no later than the fifteenth day. Such a reward system is developed in large organizations, as it is economically difficult for small enterprises. The problem is that even large enterprises are not able to understand the efficiency of work in half a month. For this reason, prizes are awarded with a delay of several months. But from the point of view of the law, this is a violation, so the employer falls under administrative responsibility.

Quarterly awards

If there are several options for calculating the annual bonus, quarterly rewards should be issued on time. Namely, not later than the fifteenth day of the month that follows the worked one.

Payments upon dismissal

There is much debate on this issue. It is necessary to understand the question so that no outstanding moments remain.

A dismissed person can count on a bonus only until dismissal.But even then, accrual of incentives will be based on the results of the enterprise for any period. For example, this may be a bonus payment for the year. That is, the employer cannot issue a bonus during the employee’s work period, but is obliged to do so after dismissal. Because the payment of a reduced amount of monetary incentives or non-payment in general are actions that violate the law.

You can not pay the full amount of the bonus only if the employee has worked only half of the billing period. In this case, the calculation of the premium will take into account the time spent on mining.

In many enterprises, internal documents stipulate that the payment of the premium in full is carried out only if the reason for dismissal is valid. This may be moving, military service, pension, and more.

If the employer refuses to pay the bonus after the employee has been dismissed, the latter must contact the boss because such actions are illegal. When the employer still refuses the payment, the former employee has the right to demand his money through the court. As a result, the employer will be obliged to pay not only monetary incentives, but also moral damage (if indicated in the lawsuit), together with all costs of the trial.

In the event of dismissal at his own request, the employee must act as follows:

1. Draw up a letter of resignation in writing, in which it is necessary to indicate the terms of dismissal.
2. The document must be signed by the head.
3. The application is registered.
4. After registration, a dismissal order is created, which is registered.
5. An employee is studying a document.
6. There is a payroll and vacation compensation.
7. The employee receives a work book and signs its receipt.
8. The employee receives a pay slip on hand.

It is important to know that premiums are calculated based on their type. But if a person quits due to non-fulfillment of his labor duties, then the management has the right to refuse to pay him a monetary incentive.

Prizes to the military

The payment of bonuses to military personnel is regulated by law, and therefore there are rules for its payment.

1. Contract employees receive cash incentives. The size of the bonus is equal to three monthly salaries per year.
2. Bonus payments can be made every month or every quarter. It is paid at the same time as cash allowance.
3. When calculating the premium, the monthly salary of a soldier, his rank and position are taken into account.
4. The prize amount is set by the Minister of Defense of our country, heads of executive authorities, the Prosecutor General of Russia, and the chairman of the investigative committee.
5. If a soldier has served an incomplete period for which a bonus is accrued, then a monetary incentive is paid according to the time actually worked.
6. The prize is not awarded to servicemen who serve in units where their own bonus system for overfulfilling or completing tasks is established. And also the incentive is not paid to those employees who are outside the country and provide technical assistance there. When a soldier is at the disposal of his superiors, he also cannot count on a bonus.
7. If a soldier has died, then bonuses for the actual performance of duties are paid to the next of kin. This can be a wife or husband, minor children or their adoptive parents (guardians), parents or people who are dependent on an employee.

The Minister of Defense can only establish the procedure for paying premiums, the rest is regulated by the government of our country.

What to do if the employer violates the rules for issuing bonuses

It is not uncommon for employers to avoid paying bonuses. They find a reason to keep the promotion by imposing all kinds of fines.

The law prohibits the collection of fines from employee salaries, and therefore all fines are imposed on the bonus.If an employee has doubts about the legality of the management’s actions, he can appeal to the court for help.

But before you take such a step, you should study all the documentation of the organization. This includes a sample order for the payment of a bonus, an employment contract, other internal acts. During the study of documents, it is worth paying attention to such aspects as the timing of the award, to whom it is due, from what sources the bonus is paid, the size of the award, the payment procedure, the reasons for refusal to pay the award.

If violations are found, the employer may incur the following liability:

1. Administrative Such liability means a fine. There is a nuance: if a person is repeatedly punished for the same offense in the past, then he is forbidden to occupy leadership positions for a term of one to three years.
2. The employer pays interest. This occurs in case of non-payment of salary and other similar violations. The employer must pay, in addition to the premium due, interest for each day of delay.

When personal income tax is not charged

Basically, all bonuses are taxed because it is the same employee income. But there are two exceptions when taxes are forgotten:

1. Foreign, Russian, international awards that are awarded for scientific and technical achievements. In addition, prizes in the field of education, literature, art, culture are also included here. Media tax bonuses that are consistent with our government’s list are not taxed.
2. Award of the highest officials of the subjects of our country. They are also awarded in the fields of art, science, education, technology, literature, media.

In addition to income tax, insurance premiums are paid from each premium to non-budget funds, as well as to social insurance. The latter is mandatory for all employees and insures against occupational diseases and work accidents.

Conclusion

In fact, understanding what a prize is is not so difficult, the main thing is to approach the issue thoroughly.

In most organizations, all employee benefits are paid on time. But if suddenly there was a misunderstanding with the employer and it is impossible to solve it peacefully, then you need to defend your interests in court.

Only after the trial it will be possible to get your money, but you should not abuse it. Before you take such a step, it’s still worth trying to agree.

And do not forget that the prize is the same income as everyone else. Therefore, it is necessary to pay taxes.