Employee bonus programmes: Incentivising for more motivation

What is an employee bonus?

An employee bonus is a type of reward that companies give their employees for their work and performance. A bonus can take various forms, e.g. extra money, gift cards, holidays, personal gifts. Employee bonuses can be part of an employee incentive programme, as recognition for special performance or for a special contribution made by the employee to the company.

The aim of employee bonuses is to increase employee motivation and loyalty and boost company performance. Another positive side effect of an employee bonus is that a company is perceived as particularly attractive by the public. If the employee bonus is up-to-date and exceeds the standard offers on the labour market, the company clearly stands out from its competitors.

This is to be distinguished from the area of bonuses. This refers to additional payments over and above normal pay. For example, Christmas bonuses, holiday pay or a special payment for a company anniversary. These payments do not count as employee bonuses, but should be considered separately.

What bonuses are there for employees?

A basic distinction can be made between monetary and non-monetary employee bonuses.

Monetary employee bonuses include, for example, a salary increase, contributions to the company pension scheme or health insurance. Sales commissions or performance-related and annual cash bonuses are also monetary bonuses.

In contrast, non-monetary bonuses are benefits in kind and perks. These include, for example, subsidies for local public transport or a petrol voucher. However, paid further training, discounts in partner shops, flexible working hours or club memberships also fall into this category.

How high can bonus payments be?

Firstly, it should be noted that the amount of a bonus payment is generally not limited. Companies are free to decide how much bonus they pay their employees. Employees are not entitled to such a payment.

Targets are often agreed between the employee and the company. If these are achieved, the employee receives the bonus.

For bonus payments above a certain amount, it should be noted that they cannot be paid to the employee tax-free. The company must pay tax on them in the same way as a normal salary, so that in the end only part of the bonus reaches the employee.

For bonus payments above a certain amount, it should be noted that they cannot be paid out to the employee tax-free. The company has to pay tax on them in the same way as a normal salary, so that in the end only part of the bonus reaches the employee.

Other bonuses can therefore be much more favourable for companies and employees. For example, there are certain tax-free limits that can be utilised as part of an employee bonus programme. According to § 8 para. 2 sentence 11 ESTG, companies have the option of giving their employees bonuses worth up to 50 euros per month free of tax and social security contributions. Further tax-free bonuses are possible on special occasions such as birthdays or anniversaries.

Different types of bonus programmes for employees

Employee participation programmes are as diverse as the employees of a company. Targeted incentive systems for sales exist alongside individual programmes for employees in administration, sales, logistics or nursing. What they all have in common is that employees receive a bonus for a predefined performance.

In our article ‘More success in sales with a sales employee programme’, we look specifically at bonus programmes for direct and indirect sales.

Employee loyalty programmes include traditional points systems, but also measures designed to make working at the company particularly attractive. These can be home office opportunities, travel allowances or special vouchers.

Employee motivation programmes aim to increase productivity and make employees feel valued for their performance. If, for example, an agreed target is achieved in a department, bonus payments can be made.

In addition, an employee bonus programme can also aim to attract new employees. For example, if an employee recruits friends as new employees, the company can pay the employee X amount.

How do employee offers work?

Coloyal offers you the widest variety of customised employee bonus programmes. With our loyalty suite, we create an employee offer in your corporate identity in three simple steps:

1. What do you want to achieve with the programme? Our employee bonus programme adapts to the circumstances of your company. Do you want to reduce staff turnover or reward sales staff for sales? You can easily achieve this with predefined actions. You can have a certain number of points paid into a points account for special performance or for standing in when an employee is ill.
2. Who should take part in the programme? You are free to decide who should take part in the employee bonus programme. If only individual employees need a little motivational boost, we can set up the programme just as easily as for entire teams and departments.
3. How do you want to reward employees? We offer a wide range of rewards. From digital vouchers, non-cash rewards and training programmes to team events, you’ll find exactly the right solution for your company.

Would you like to introduce an employee bonus programme in your company? We present our solution in detail under ‘EMPLOYEE INCENTIVES’.