13.12.2018

What Do UK Holiday Bonuses Look Like?

End of year bonuses have always been a topic of interest to employees, full of debate and controversy. According to Instant Offices with a constant debate of “will they, won’t they?” guessing game can be a stressful one, but overall there has been an increase of the amount being paid out in bonuses.

According to the Office of National Statistics, in 2017 the average bonus paid per employee was £1,600, with UK employees collectively earning £46.4 billion in bonuses; the highest record and a 6.5% increase compared to the previous financial year.

And the areas with the most generous employers? Global account managers, chief operating officers and chief technology operators lead the pack with a median annual bonus of £33,500, £30,000, and £25,000, respectively.

Which jobs offer the highest bonuses?

There are some jobs that pay cash bonuses that are far above the average, like enterprise sales managers who, according to job site Glassdoor, can earn annual bonuses of up to £55,000, which is almost double the UK’s national average of £28,200.

Interestingly, kitchen designers also top the list of high earners, receiving larger bonuses than CEOs. On the other end of the spectrum, people employed in health and social work had the lowest average bonus of close to zero.

The industries with the highest annual bonuses?

Enterprise sales manager – £55,000
Global account manager – £33,500
Partner – £30,000
Chief operating officer – £30,000
Chief financial officer – £30,000
Kitchen designer – £26,500
Chief technology officer – £25,000
Chief executive officer – £25,000
Channel manager – £25,000
Business development consultant – £23,500

What are the benefits of bonuses?

A year-end bonus is a good way to thank employees for the hard work they have done throughout the year, and is a simple gesture that will not only keep talented staff but make employees feel valued respected and appreciated. An annual bonus can not only lift spirits but also give staff a reason to stay at your company.

Finding and retaining top talent is a tough feat for employers, so you need to be prepared to go the extra mile to keep the talent you do have. In fact, 48% of UK employers predicted not being able to hire suitable candidates to fill permanent positions in 2017, while according to CV Squad, 72% of businesses cite problems attracting skilled employees.

Improve levels of motivation

Holiday or year-end bonuses or monetary gifts can be used as a tool to motivate staff and propel them to achieve specific goals, meet targets or complete projects. These can act can important motivators that can benefit both the staff and the business as a whole.

What companies need to be aware of when gifting holiday bonuses

While a bonus is usually given by the discretion of a company, some restrictions still apply when handing it out at the office:

Tax implications

Giving employees a bonus may be a nice gesture, but it’s not as simple as merely handing out free money. Just like any other payment, bonuses are taxable.

Policies

There may be policies put in place by your company regarding bonuses and gifts, so it is best to be aware of these policies before making promises to your team.

Fairness

Bonuses can be a point of contention among members of staff, especially if they feel they have been treated unfairly. It’s crucial to be fair when handing out bonuses or gifts or you could end up with some conflict in the workplace.

Are there holiday bonus guidelines?

Generally, the size of the bonus depends on the employee. Employees who make more money, have been at the company the longest, spend more time at the office or who play a fundamental role in the company will normally receive a more generous bonus than others. Employers can distribute bonuses randomly if the company can afford it, or the amount given can be specified by contract.

However, this does not mean that lower earning or new employees do not deserve a bonus, therefore an employer should consider the amount of time and effort an employee puts into their role. It is also important that employers not let personal opinions influence the decision and that all staff receives a bonus relative to their role at the company.

Bonuses can be structured according to:

Percentage of salary
A flat rate payment (e.g. a full month’s salary/13th cheque)
Percentage of new sales, expectations, or gross profit to a salesperson
Percentage of company profit

Whilst bonuses are a great way to show employees they are appreciated, they can be a controversial topic – a cash bonus a way for average paid works to earn a decent living, however some employees could be being awarded despite below standard performances. If possible, be sure to include everyone working for the company in your bonus scheme, while companies that cannot afford to give cash or gift bonuses should consider giving the gift of time, which gives employees additional paid time off to spend with friends and family.

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