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Employee Bonus Plan basics

If you run a business and would like to reward employees with a bonus, you can use a Employee Bonus Plan. This document enables you to plan for the payments of an annual bonus. You can use it to plan and implement an Employee Bonus Plan, in which the share of the net profits is placed in a "bonus pool" for full-time employees.

Use the Employee Bonus Plan document if:

  • You'd like to administer bonuses by implementing a "bonus pool."
  • You regularly give annual bonuses, and would like employees to sign a document that outlines the bonus process.
  • You're the accounting manager of a business that offers bonuses.

With an Employee Bonus Plan you can identify who is responsible for paying out the bonus, and who will determine the amount of money in the bonus pool. This is a document that can be signed by an individual employee, or multiple employees. An Employee Bonus Plan is one way of incentivizing and rewarding hard work on the part of your employees; this document gives you flexibility in administering the bonus.

Interested in learning more about essential employment forms? Check out our HR Guide for additional information.

Other names for this document: Employee Incentive Plan

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Sample Employee Bonus Plan

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