30 Average Bonus Statistics [2023]: What Is The Average Bonus Percentage? - Zippia (2024)

Research Summary: While everyone loves bonus pay, salaried workers take home more than their hourly counterparts. But the good news is that since the start of the COVID-19 pandemic, the number of companies that offer year-end bonuses has been rising steadily. After extensive research, our data analysis team also concluded:

• As of 2022, the average bonus pay in the U.S. is 11% of salary for exempt employees, 6.8% for nonexempt salaried employees, and 5.6% for hourly employees.

• 33% of companies in the U.S. offer year-end bonuses.

• 40.5% of all U.S. workers have access to nonproduction bonuses.

• The most common bonuses received are year-end bonuses (11% of all employees), holiday bonuses (6% of all employees), and cash profit-sharing bonuses (7% of all employees).

• The Information industry provides the most access to all bonuses, with 69% of employees having access.

• 61% of companies say that the bonuses they offered in 2021 were higher than 2020.

For further analysis, we broke down the data in the following ways:
Bonuses | Industry | Trends and Predictions | Opinions on Bonuses

General Bonus Statistics

Though the FLSA (Fair Labor Standards Act) doesn’t require bonuses on top of an employee’s regular earnings, many companies still choose to provide them. In fact, 33% of companies currently provide year-end bonuses. Here are some other interesting facts:

• As of March 2020, the average nonproduction bonus makes up 2.3% of the total cost of compensation.

  Overall, the average cost per hour for nonproductive bonuses for all private industry workers was $0.80, or 2.3% of the total cost of compensation.

  This number also varies slightly between establishments with 100 workers or more and those with less than 100 workers. For the former, the bonuses make up 2.7% of the total cost of compensation, whereas the latter is only 1.7%.

  

• The information industry provides the most access to all bonuses, with 69% of employees having access.

  This industry also takes the top spot when it comes to year-end bonuses (26%), cash profit-sharing bonuses (16%), and referral bonuses (24%).

• The leisure and hospitality industry has the worst access to bonuses, at an average of only 22%.

  47% fewer workers have access to bonuses in this industry compared to the information industry. Only 7% of employees have access to year-end bonuses in this industry, and only 4% have access to holiday bonuses.

• 33% of companies in the U.S. offer year-end bonuses.

  This is an increase of 3% from 2019-2020. Experts speculate that this is a result of the need to incentive work during the COVID-19 pandemic.

Types of Bonuses Statistics

Of course, there are different types of bonuses companies offer. The most common include year-end, cash profit-sharing, employee recognition, holiday, longevity, payment in lieu of benefits, and referral bonuses. Here are the insights our research has uncovered:

• Year-end bonuses are the most common type of bonuses present in companies with 100 employees or less.

  For companies with less than 100 employees, year-end bonuses are provided to 14% of workers. By contrast, for companies with over 100 employees, that number is only 8%.

• Cash profit-sharing bonuses are the most common type of bonuses present in companies with 100 employees or more.

  For companies with over 100 employees, cash profit-sharing bonuses are provided to 11% of workers. By contrast, for companies with 100 employees or less, that number is only 3%.

• 99% of professionals are eligible to receive referral bonuses.

  Given that nearly half of all hires come from referrals, it’s no surprise that many companies offer referral bonuses to employees. However, this percentage decreases drastically as you go up the chain of command. Only 33% of executives and 62% of upper management are eligible for referral bonuses.

  

• Employee referrals account for 40% of all hires.

  Despite employee referrals only making up 7% of the candidates who apply, they result in a staggering 40% of hires. That’s significant, considering that 62% of interviews come from job boards and other employment websites.

• The average referral bonus is between $1,500 and $2,000.

  Other common rewards include extra PTO, gift cards, points for prizes, and various forms of company recognition.

Bonuses by Industry Statistics

The type of industry you work in can also significantly affect the bonuses you can receive and whether you receive bonuses at all. For example, only 13% of public jobs offer incentive bonus plans for non-executives, compared to 47% of private jobs. Our research also showed the following:

• Private jobs are 34% more likely to offer incentive bonus plans for non-executives than public jobs.

  Only 13% of public jobs offer incentive bonus plans for non-executives, compared to 47% of private jobs. This is also true for referral bonuses, where only 13% of public jobs offer them, as opposed to 62% of private jobs.

  See Also

  What Are Bonuses and How Do They Work?Expect 9-10% salary hikes this year; Deloitte says pay increment outlook now better than Pre-CovidUnveiling Deloitte Compensation: A Comprehensive Analysis

• The construction industry provides the most access to holiday bonuses at a rate of 11%.

  And, when extended out to include occupations in extraction, farming, fishing, and forestry to that figure, the number of employees who have access to holiday bonuses rises to 13%.

• The information, financial activities, and manufacturing industries provide over 50% of their workers with bonuses.

  These industries all offer the most access to all types of bonuses. As far as the number of employees who have access, 69% of those in the information industry do, 65% of those in financial activities do, and 55% of those in manufacturing do.

Industry Type	% of Workers With Access to All Bonuses	Cash Profit-Sharing	Employee Recognition	End-Of-Year Bonuses	Holiday Bonuses	Longevity Bonuses	Referral Bonuses	Other Bonuses
Administrative & Support & Waste Management	26	1	1	8	4	1	6	6
Construction	41	5	1	18	11	1	3	5
Education & Health Services	32	1	3	7	6	1	6	9
Financial Activities	65	11	9	18	5	2	9	21
Information	69	16	7	26	2	1	24	20
Leisure & Hospitality	22	2	1	7	4	1	4	1
Manufacturing	55	13	2	16	6	1	5	20
Professional & Business Services	43	5	6	14	4	1	9	12
Trade, Transportation & Utilities	38	12	1	7	6	1	4	7
Other Services	26	1	1	8	13	1	1	2

• Management, business, and financial occupations offer the most access to bonuses, with 60% of employees having access.

  And the most common type of bonus provided is a year-end bonus, which 19% of employees have access to. 17% of employees also have access to other bonuses.

• Those in service occupations have the least access to bonuses, with only 25% of employees having access.

  In these occupations, only 2% of employees have access to cash profit-sharing and employee recognition bonuses. Year-end bonus access isn’t much higher either, at only 7%.

• Amazon and Walmart upped their bonuses in 2020.

  As of 2020, full-time Amazon and Walmart employees will receive a “special recognition” bonus of $300, and part-time employees will receive $150.

• Companies with 100 workers or more provide 7% more access to bonuses.

  At companies with 100 employees or more, 44% of all workers have access to bonuses. On the other hand, that number is only 37% for companies with 100 employees or less.

Bonuses Trends and Predictions

2020 and the COVID-19 pandemic have changed the landscape of bonuses in private industries. While some companies offer more bonuses, overall bonus amounts have fallen by 0.7% from 2019. Here are some other facts:

• Currently, at 11% of salary, today’s bonuses are slightly higher than those in 2020 but lower than 2019.

  In 2019, bonuses made up an average of 11.7% of salary. This dropped down to 10.9% in 2020. However, as of 2021, that number is beginning to rise slowly, now at an 11% average.

• 76% of companies plan on awarding a bonus in 2021.

  While bonuses are generally tied to employee performance, companies expect to pay more of them this year due to the COVID-19 pandemic.

• Access to bonuses has increased by 3.3% since 2021.

  Since the start of the COVID-19 pandemic, the number of companies that offer year-end bonuses is up from 30% to 33%

Employee Opinions on Bonuses

All of this sounds great, but what do employees think about bonuses? Overall, bonuses lead to workers being eight times more engaged in the workplace. Our research also found that:

• 45% of Americans expect higher bonuses this year.

  While 46% also say they expect their bonuses to be the same, many still expect higher bonuses as the result of the COVID-19 Pandemic.

• Employees who receive bonuses or other regular rewards are 8x more engaged.

  These rewards can be anything from year-end, cash profit-sharing, employee recognition, holiday, longevity, payment in lieu of benefits, and referral bonuses. Plus, other regular rewards add to this statistic as well, including free snacks and coffee.

• 69% of employees reported that they’d like to receive a gift card, while 73% of employees would prefer a cash incentive.

  While this is a difference of only 4%, it does show that employees generally prefer cash incentives over gift cards.

• 53% of employees prefer 12 monthly bonuses.

  Compared to the 47% who prefer one yearly bonus, 53% of employees prefer monthly bonuses over yearly bonuses.



• 1/3 of all employees would prefer public recognition over a private $500 bonus.

  Recognition among co-workers matters to many employees, as 33% would prefer being publicly recognized at their company over receiving a private $500 bonus.

Bonus Statistics FAQ

1. How are bonuses paid?

   Bonuses are generally based on performances and can be given monthly or yearly. However, yearly bonuses are the most common. Typically, you will receive your bonus as a percentage of your salary or as a fixed amount. For example, you could receive a bonus that’s 11% of your salary, or a flat $1,000 bonus.

2. Why do companies give bonuses?

   Bonuses are given to reward employees. For example, employers want to encourage excellent employee performance and increase employee retention. And, it works! Employees are 8x more engaged when they receive rewards like bonuses.

3. How much is a bonus usually?

   Bonuses can be anywhere from $50-$5,000, and this number varies wildly depending on your pay and the context of the bonus. For instance, if you make $40,000 per year and receive an 11% bonus, you’d make $4,400 in bonuses.

   However, if you only make $30,000 per year, that number would decrease to $3,300. For fixed bonuses, the average Christmas bonus might be $300, but the average referral bonus can be up to $2,000.

4. What is a good bonus?

   Generally, a “good” bonus would be anywhere between 10-15%. However, a bonus of 15% would likely be considered more than good, as it’s one of the highest percentages and somewhat rare.

5. What is a normal year-end bonus?

   A normal year-end bonus will vary from position to position, but the average bonus pay in the U.S. is 11% of exempt employees’ salaries, 6.8% of nonexempt employees’ salaries, and 5.6% of hourly employees’ salaries.

   This is the percentage of an employee’s salary that they’ll earn in bonuses throughout the year, whether via a year-end bonus, a holiday bonus, or cash profit-sharing bonuses.

   Suppose you get to the end of the year and haven’t gotten any other bonuses. In that case, it’s reasonable to expect your year-end bonus to account for the average bonus pay percentage that correlates with the type of position you hold. If you have received other bonuses throughout the year, your year-end bonus will likely be less.

   The size of your year-end bonus will also depend on the financial health of the company you work for. If it’s struggling to earn a profit or recovering from an economic downturn, the chances are that your bonus will be smaller than you might think. On the other hand, if your company is doing well, you might receive more.

6. Is a 10% bonus good?

   Yes, a 10% bonus is good. The average exempt employee earns 11% of their salary in bonuses each year, the nonexempt salaried employee earns 6.8%, and the average hourly employee earns 5.6%.

   So, if you’re an exempt employee, a 10% bonus is good because it’s on par with what most other workers in your shoes earn in bonus pay each year. If you earn other bonuses on top of this, you’re earning more in bonuses than average.

   If you’re a nonexempt salaried employee or an hourly employee, a 10% bonus is far higher than the average annual bonus pay someone in your position receives, so it’s an amazing bonus.

   As with anything, there are times when a 10% bonus isn’t as good, such as when you aren’t being paid enough to begin with, or are lacking other benefits and support you’d expect your company to provide.

   A 10% bonus doesn’t stop being a good thing in these situations, but its shine may be tarnished if it feels like your employer is trying to appease you.

7. Do bonuses have to be paid by March 15?

   No, bonuses do not have to be paid by March 15. Companies can pay bonuses whenever they like, but many choose to set March 15 as the deadline for tax reasons.

   Many companies can deduct bonuses on their tax returns as long as they pay them within two and a half months after the tax year ends.

   So, if a company wants to deduct bonuses it has paid from its tax year that ended December 31, 2020, it has until March 15, 2021, to pay them and still be able to list them as deductions on their 2020 tax return.

   Usually, the companies that take advantage of this policy are the ones that calculate their bonus pay budget based on the organization’s calendar year performance. This means the company won’t know how much they can give their workers in bonuses until it calculates how much it’s earned through December 31.

   Being able to pay those bonuses up until March 15 gives their accountants and managers time to figure out how much each person gets and add it to their paychecks while still giving the company the tax benefits of providing bonus pay.

8. How do you calculate a prorated bonus?

   To calculate a prorated bonus, you divide the number of days, weeks, or months the employee worked by 365, 52, or 12, respectively, then multiply the answer by the total bonus amount you would’ve paid for a full year’s work.

   Often companies will prorate bonuses for employees who either haven’t or won’t work the entire year they’re earning a bonus. This is a common practice for other benefits such as paid time off, as it isn’t good money management for an organization to pay employees for time that they weren’t even hired.

   Suppose you give all of your employees a $1,500 bonus at the end of the year. They have all worked for you for over a year, except for one employee hired on November 1. To calculate her bonus, you’d take the number of days she worked for you (61) and divide it by the total number of days in a year (365). This gets you about 0.167.

   Next, you’ll multiply 0.167 by $1,500, which gives you $250.50. This is the prorated bonus that your newest employee earned.

9. How do you calculate a KPI bonus?

   To calculate a KPI bonus, you’ll first take the number of KPIs the employee reached and multiply that by your bonus rate.

   KPI stands for Key Performance Indicator, which, when used regarding employees, refers to benchmarks that a company sets for its employees to see how well they’re performing. Many managers, for example, are given bonuses based on how many projects they close on time and under budget.

   Each company will have a different formula for how it pays its KPIs, but you could calculate a KPI bonus for a manager in this example by adding up how many projects she closed on time and under budget and multiplying it by your bonus rate.

   Say this particular manager closed eight projects on time and under budget, and your company’s KPI bonus rate is 50% of the revenue earned from those projects. To calculate the KPI bonus, you’d just calculate how much revenue the company earned on the projects – say it was $8,000 for this example – and multiply it by 0.5 (50%).

   The answer would be $4,000, so you’d pay your manager $4,000 in a KPI bonus for those projects.

Conclusion

Considering the fact that bonuses increase employee engagement and performance eight times over, it’s somewhat surprising that only 40.5% of employees have access. However, this varies significantly from industry to industry.

Certain industries, like the information industry, provide 69% of employees access, while others like the Leisure and Hospitality Industry only provide access to 22%.

Overall, bonuses are a fairly popular and effective way to improve the workplace. Most employees appreciate them and work harder when they’re provided. Perhaps that’s why the amount of companies who offer bonuses has increased by 3.3% over the past year.

Sources:

1. U.S. Bureau of Labor Statistics. “Employer-provided bonuses: what are they, what types of businesses offer them, and who receives them?.” Accessed on August 18, 2021.

2. SHRM. “More Companies Offer Bonuses as a Challenging Year Ends.” Accessed on August 18, 2021.

3. SHRM. “Designing and Managing Successful Employee Referral Programs.” Accessed on August 19, 2021.

4. Undercover Recruiter. “Why Employee Referrals are the Best Source of Hire.” Accessed on August 19, 2021.

5. Governing. “How Public Employee Benefits (Beyond Pensions and Health Care) Compare to the Private Sector’s.” Accessed on August 19, 2021.

6. ValuePenguin. “2 in 3 Companies Expect to Offer Year-End Bonuses.” Accessed on August 19, 2021.

7. Benefits PRO. “Employee raises and bonuses are returning in 2021.” Accessed on August 19, 2021.

8. Bonusly. “What is Employee Engagement?.” Accessed on August 19, 2021.

9. GiftCards. “About Gift Card Statistics.” Accessed on August 19, 2021.

10. SHRM. “Better Pay and Benefits Loom Large in Job Satisfaction.” Accessed on August 19, 2021.

11. Human Resources Today. “2021 Compensation Budgeting Forecast Part 2: Incentives, Bonuses, and Variable Compensation.” Accessed on August 19, 2021.