Have you been a good employee this year? Are you looking forward to the gift of Christmas bonus? So when exactly is the extra pay going to make its way down the company chimney and into your bank account? Let’s take a look and cover how to calculate it.
Extra payments are seemingly that of a myth, they are about as common as a dodo bird and when they happen, it usually boosts your Christmas spirit. Companies are slowly, yet surely fading out the bonus scheme, so if you’re lucky enough to still work for a company which still has this business model, then you’ll want to continue reading.
Amounts will vary from company to company, and may be supplemented by gifts from customers – you will probably know this as Christmas boxes – they’re usually paid direct. Also, some employers provide an annual bonus at other times of the year. Most bonuses are nominal, and are based on performance.
When should you expect the bonus?
We all know that we can expect the ghosts of Christmas past, present, and future on the evening of 24 December, but when can we expect the gift of a Christmas bonus? Is there a specific day that everyone processes the payment? Or, are companies lapse when paying out bonuses?
The date that Christmas payments are made will vary mostly on each company and the agreement they have with their employees. Although, the most common dates to expect to receive it are between December 20 and 25 each year. Just in time for some last-minute shopping.
How is the Christmas bonus calculated?
In order to calculate your Christmas pay, you need to find out your accrual (the point in which you are entitled to collect. i.e. after one year service) at your company. This can be calculated in two ways;
If your company offers an annual accrual, the right to receive this is usually generated from the fact you have worked in the company for a certain amount of time. You may be entitled to receive a percentage of the full payment if you have worked less, depending on the CEO’s Christmas spirit.
To calculate how much you should receive, you can use this formula:
Full monthly salary / 365 days x days worked in the company = extra Christmas pay
For example, if your monthly salary is £2,500 and you have been working at the company for 240 days this year, you can then easily work out how much you should expect: 2500/365 x 240 = £1645. Nice.
If your company runs this type of accrual, and you receive two bonuses per year, the right is generated from the date in which you last received your bonus payment. This means that, if you have worked in the company and have received a previous bonus payment, you can expect the following in full.
The formula to perform the calculation is very similar to the previous formula;
Full monthly salary / 140 days x days worked in the company
Using the same example from above, you should make the following calculation: 2500/140 x 24 = £4285. This method is much more beneficial for those who have been working in a company for a short time.
And even if you receive something that differs from the above, the Christmas bonus has become a rare occurrence, and not everyone will receive an extra payment. So, if you do, enjoy it!
Remember, you can always use an online Human Resources solution to help you calculate what exactly each employer should receive.