You should know how wonderful it is to get extra rewards in addition to your salary or income. Trading will be more enjoyable if you don’t have to do a lot to get this extra bonus. The same is true for Forex. Most Forex brokers offer bonus programs to attract new traders and build relationships based solely on mutual rewards. However, each bonus program has a different structure, which affects the actual rewards you receive and how you use them. 

This is why you should try to learn each bonus program before signing up with a particular broker. This article will focus on the bonus you will receive when making a deposit or already doing trading. Traders would like to make this more memorable with the best offers they can avail & with large number of successful trades.

One thing in particular this Christmas season, choosing the best trading offers with a best & trusted broker is a challenge. It is getting sometime harder to find a site that offers the best Forex bonuses. And after all, Forex bonuses are a key element of the platform and are usually the main reason traders choose a website to log into.

• How do I receive Xmas Bonus From my Broker?
• How Does the Xmas Bonus Benefit me?
• How Can I Make Money With Xmas Bonus?
• Which Forex Broker Gives no Deposit Bonus?
• What Company Gives the Biggest Christmas Bonus?
• Why do Companies Give Christmas Bonuses?
• How Many Companies Give Christmas Bonuses?
• Can I Withdraw InstaForex Bonus?
• How Much Bonus is Normal?
• Can You Give an Employee a Bonus Without Taxes?
• How to Calculate Bonus Taxes

How do I receive Xmas Bonus From my Broker?

Depending on the Forex broker you choose, the conditions for receiving the service may have some characteristics, but in most cases the customer will be required to undergo an identity verification process. Out of many brokers; the best ECN broker Xtreamforex is offering various bonuses on this Christmas season but here we are putting the light on their Xmas Bonus.

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Let’s go forward and see how you can enroll in it & get the benefit of it. This usually includes the following steps: 

• Register your trading account on the Xtreamforex website 
• Check your email and phone number Proof of identity by scanning or sending a copy of your ID  or passport
•  Make an initial deposit to your trading account

Traders will receive the bonus amount to their trading account after completing all these steps. The processing time for this payment depends on the broker. So for some brokerage firms, it only takes a few minutes, but for others it may take longer.

However, in most cases, traders will receive the bonus amount within a day of their first deposit. Xtreamforex is offering non-withdrawal bonus Xmas bonus which is for limited period for all traders. You can avail the other benefits as well with the help of Xtreamforex Xmas Bonus.

How Does the Xmas Bonus Benefit me?

Opportunity to earn more:

Let’s say you fund your account with $5000 and the bonus is 10% of your deposit. So $500 is added. This means your total capital is now $1,500. You can then trade this amount without increasing your risk. After all, the extra $500 is a bonus. If you are lucky enough to make profitable trades, you can earn more from your deposits.

Increasing your initial deposit allows you to hold more positions and trade more lots. Suffice it to say that the best Deposit Bonus Program gives you more opportunities in the Forex market and increases your chances of making more money.

Trade with more leverage:

The more capital you have in your account, the larger the position you can trade. This increases your chances of earning more. Who doesn’t want this? Because part of the capital you trade is a bonus, you can use your position to your advantage than if you were only using your own funds. This slightly reduces the risk normally associated with increasing leverage.

Best way to test trading platform performance: 

Moreover, if any trader just wants to see the performance of your trading platform, you can combine the minimum deposit with the deposit bonus to get enough money to explore. Use funds to see how fast the platform is executing transactions to prevent slippage. Or, find out if the broker allows a re-quote.

To avail these types of bonuses, you should carefully consider the terms and conditions of the bonuses programs offered by various brokers. This is because some of them remove bonuses earned with withdrawals. On the other hand, others can withdraw their bonus only after reaching a certain trading volume. You would be better off using a broker that offers a proportional withdrawal of the bonus when withdrawing.

For example, if you withdraw 60% from your available balance, 60% will also be withdrawn from your bonus. This trade is much better than losing all your bonuses. But we recommend Xtreamforex Xmas bonus 2021 which is offering 10% tradable bonus up to maximum deposit of USD 2000. So, take an advantage of it & enjoy your Christmas season trading with Xtreamforex.

How Can I Make Money With Xmas Bonus?

Realizing the need to save your extra cash doesn’t mean that you can’t spend money for your family. You can budget a portion of the cash to celebrate the holidays but invest a bulk of it wisely to make sure that the money will grow and last for a long-time.

When you invest your savings, your ultimate goal is to build wealth that will take care of your needs in the future. Earning an unexpected financial rewards is a great opportunity to plan and put your personal finance in order. Here are the five ways you can maximize your cash gifts and bonus this Christmas:

1. Invest by paying off your debt

If you have credit card debts that you have been paying for some time now, this is the best time to reduce or pay it completely. Imagine the interest expense that you will save by paying your debt. If you are paying 3.25% interest rate per month on your credit card balances, this is the amount of investment returns that you will earn by paying off your debts.

When you decide to pay off your debts, make sure that you separate your good debt from the bad debt. The debts that you need to prioritize to pay off are those that you purchased for consumption. For example, credit card expenses you incurred for entertainment, groceries, eating out with friends or travel. Using debt to acquire things that do not increase in value are called bad debts.

2. Invest for capital appreciation

One way to grow your savings is by investing in assets that will rise in value over time. Stocks, mutual funds or real estate are some of the assets that you can buy for capital appreciation. You can keep your money in these assets not for short-term, speculative appreciation but for long-term investment.

Investing in assets for capital growth is also a good way to hedge your savings against inflation. For example, if the dollar-peso exchange rate goes beyond Php50 to a dollar, prices in general may also go up due to higher costs. When this happens, listed companies at stock exchange also have to increase selling prices, which increase income. Higher income drives higher stock prices.

3. Invest for cash flow income

Another way to grow your savings is by investing in assets that pay regular cash flows. Instead of keeping your money in a regular savings account that pay you less than 1% a year, you can invest in reputable companies that pay high dividend yields or interest rates.

For example, you can invest in dividend paying stocks or bonds that can pay 6% or more per year. Of course, every return always comes with risk. Make sure that you choose the right investment that aligns with the risk that you are willing to take.

4. Invest for peace of mind

The purpose of creating an emergency fund is to provide a safety fund that can be used for personal financial crises such as hospitalization, car accidents or any major event that requires sudden cash outflow.

Ideally, an emergency fund must be at least six months of your monthly living expenses. If you have not saved enough yet, you can start to build at least three months’ worth of expenses first. You can keep this in a separate bank account so that you will not be tempted to use it for your regular expenses.

If the amount of emergency fund is substantial, you can invest a portion of it temporarily in short-term, interest-bearing money market funds that you can liquidate immediately when you need it. In this way, you don’t waste the opportunity to earn extra interest income while your money is parked for emergency purposes.

5. Invest in yourself and others

There is no better investment than investing in your personal growth. Treat yourself this Christmas by buying books to learn new skills and improve your financial literacy. Every knowledge that you will learn by studying will become part of your life skills and give you returns that will multiply in the future.

Christmas is also the best time of the year to appreciate all the people that have been part of your success. Invest in relationships by showing your gratitude. You don’t have to give expensive gifts but a simple token of appreciation that you did not forget them during this holiday season should be sufficient. If you have run out of budget, you can also show your appreciation by investing your time by greeting them with a personal message for the holidays.

Which Forex Broker Gives no Deposit Bonus?

A bonus acts as a marketing tool or cost-effective promotion, and the brokers offer to persuade beginners to make deposits. Many top forex brokers suggest this option as it allows for forex trading without risking their funds. This option is accessible to the consumers once they open a forex account or demo account in the chosen platform. Though the bonus is beneficial for traders and investors, brokers suggest this option to gain benefits in the long run.

Forex brokers use the deposit bonuses option as a tool to entice investors and traders to forex trading, providing them knowledge about trading conditions, forex account, demo account, trading bonus, and welcome bonus and help the clients make an informed decision. In simple terms, they offer free money that cannot be withdrawn immediately from the trading account but can be traded for other prospects.

There are many Forex brokers to choose from, and making the right selection is a challenging task. Several factors are considered, such as fast execution, competitive spreads, and the range of tradable assets. Hence, different types of options or bonuses are listed down to attract different types of traders.

They assist the trader in finding the specific broker with the desired profile. With Forex no deposit bonus, new traders can learn trading in a live trading environment and build their portfolio without risking their capital resources. However, these bonus offers do not necessarily benefit all traders.

Therefore, traders need to be aware of terms and conditions before accepting or signing up for any offer. A key strategy to remember is that the brokers must gain profits, which is the primary objective of the bonus campaign. Hence, it is essential to select the right deposit forex as it significantly impacts the trading outcome.

1. Pax Forex – Recommended for US Traders – 100% Bonus

Pax Forex is a famous online forex platform and the most reliable trading institution in the USA. It has a reasonable loyalty deposit bonus program too, where they match the member’s deposits 100% – for a minimum trade of $1,200 and more.

Unlike the deposit bonus offered by other platforms, Pax Forex provides you with a great deal of reward program, where every successive $1,200 deposit is matched with an additional bonus. However, the full amount is not instantly credited but is divided and paid in 12 monthly installments.

• The broker supports all ranges of trading accounts
• The 100% bonus is highly competitive
• Awards bonus on successive deposits

2. AVATrade | 2 x $200 Forex Welcome Bonuses

The AVATrade group offers an epic 20% bonus of up to $10,000. This means that traders need to deposit $50,000 to get the maximum deposit forex on AvaTrade UK. However, one needs to deposit a minimum of $100 before accessing the bonus, and their account needs to clear verification before funding. For withdrawing the bonus out, traders get $1 for every 0.1 lot that is traded.

• 20% welcome bonus of up to $10,000
• Minimum deposit $100
• Verification of the account before the bonus is credited

3. Markets.com | £25 Forex No-Deposit Bonus

Markets.com is a major platform across the UK forex space. As there are dozens of currency pairs split across the majors, minors, and exotics, its trading arena comes with different offers. Here, traders get a £25 no deposit bonus for opening a new account at the Markets.com platform. This bonus is for new customers only, and there is no time limit as that is laid out.

• £25 no deposit bonus
• No time limit to use the bonus funds
• Valid for New customers only

4. Plus-500 | £20 No-Deposit Forex

Plus 500 is another major platform, which is targeting the forex no deposit bonus space. Once traders open an account, they are rewarded with a £20 bonus – with no deposit required. The platform is one of the most reputed forex and CFD brokers in the online trading space. Its predecessor is listed on the London Stock Exchange and Plus500 UK holds multiple licenses.

• £20 no deposit bonus
• Only available to first-time customers
• Verification of identity is required before making a withdrawal

5. FBS | Best Forex No-Deposit Bonus – $50 Bonus

Most forex brokers provide cash-based bonus programs. However, FBS offers a complete Trade 50 Bonus package. Featuring a free no deposit forex of $50 to trade in a verified account, a set of guidelines to be followed, and strategies for making the most of the free bonus.

Nonetheless, there are certain restrictions for claiming this bonus as well as the profits earned from the trading. For example, FBS allows only a maximum of 5 trade positions at a given time. And to withdraw any profits, traders are required to complete the required 30 trading days and trade at least 5 lots.

• Relatively high no-deposit trading bonus
• Maintains a global footprint and is licensed in different financial jurisdictions
• Accepts several payment processing options for deposits and withdrawals

6. XM | Multiple Forex Options Offered

XM has a variety of forex offers for beginners who do not have an account. They offer the option of claiming a $30 no deposit bonus. And to claim a more substantial bonus, they can choose the XM Broker offer with a 50% matched deposit bonus up to $1,000. This gives a 20% bonus for everything above $1,000 – up to a maximum of $4,500.

• $30 no deposit bonus
• 50% matched deposit bonus up to $1,000
• Additional 20% bonus for up to $4,500

7. CMC Markets | 2 x $200 Forex Welcome Bonuses

The CMC Markets, a UK broker, has an appealing offer for traders, which is a $200 welcome bonus that can be availed twice. Traders need to deposit their first $200, which is matched with an additional $200 by the broker, making the starting balance $400. However, traders need to trade $1 million worth of forex to withdraw the bonus funds. Once they hit $2 million worth of trades, CMC Markets broker will give an additional $200.

• $200 welcome bonus- twice
• The first deposit of $200 is matched like-for-like
• Withdraw the bonus funds when the $1 million trade requirement is hit

8. HYCM | 10% Deposit Bonus up to $5,000

HYCM is a widely popular platform that offers new customers a 10% deposit bonus. The bonus amount is at $5,000, which means that traders need to deposit $50,000 to get the maximum bonus. And they need to trade a massive set of 30 standard lots to get $1,000 in bonus funds out of the broker.

• Deposit $50,000 to get the full bonus amount
• Trade 30 standard lots to withdraw $1,000 in bonus funds

9. Tick Mill | $30 Sign-Up Deposit Bonus

Global forex broker platform, Tick Mill, offers the new customers a$10 to $30 no deposit bonus. To prevent manipulation, traders need to verify their accounts before their accounts are funded. The added asset of the platform is that it allows traders to withdraw the profits made from the $30 welcome offer.

• $30 no deposit bonus
• 100% risk-free – no deposit required
• Verify the account before the bonus is credited

10. TemplerFX | $30 No-Deposit Bonus

Similar to Tick Mill, TemplerFX also offers a $10 to $30 no deposit bonus. To avail of this offer, traders need to open an account and verify their identity. Traders are then required to trade a minimum of 5 standard lots to withdraw the bonus and any additional profits.

• $10-$30 no deposit bonus
• Not required to fund the trading account to get the bonus
• Pass a KYC or verification process before getting the bonus

What Company Gives the Biggest Christmas Bonus?

When is a bonus too big? Is there even such a thing? Here are a few bonuses that the Gratuitous Perks Police should investigate first. Staff might get a US$350 Christmas bonus; the management team a percentage of their salary, but these are fortune cookies compared to some of the biggest bonuses of all time.

Musk lines up US$55 billion

Of course, any list of financial reward in business needs to start with Elon Musk. Although not paid out yet, it was reported three years ago that the Tesla board had agreed on a 10-year bonus scheme in 2018 with its charismatic leader, worth US$55 billion.

If the Space X Founder and Tesla CEO can drive the EV manufacturer’s market cap to a level of US$350 billion by 2028, then he will max out on his stock options and deliver the full bonus. That’s around 11 million Cartier watches, or more than 10 times the gross domestic product of Somalia.

Banker scores 1,567 per cent

Back in 2013, the European Banking Authority identified that a financier based in the UK had earned a bonus that was 1,567 per cent of his annual salary. While the individual and the bank they worked for were not revealed, it was confirmed the banker was paid US$22 million for the year against a salary of US$1.3 million.

That’s an additional US$60,000 per day on top of his annual income. It was something of a last hurrah as a year later, the European Union brought in rules to cap bonuses at 200 per cent – a mere pittance!

Swimmer scores US$400K

There aren’t many well-known Singaporean swimmers or, in fact, even Singaporean sports stars for that matter, but that might change now that Singaporeans know what the financial reward is for top spot on the podium.

When Joseph Schooling touched the wall ahead of the great Michael Phelps in the 100-metre butterfly at the 2016 Rio games, he unlocked a bonus of US$400,000. American athletes only get US$13,000 as a bonus for winning Olympic gold. Although Phelps has an estimated net worth of US$80 million, so he’s doing OK.

Wall Street Christmas bonus record

The Christmas of 2006 was big for Wall Street. It was the last Christmas before the global financial crisis started to descend and New York was experiencing one of its mildest Decembers in years. On a Thursday in the lead-up to the yuletide break, then-CEO John J Mack was awarded a bonus of US$40 million by Morgan Stanley, bettering the US$38 million paid to Henry Paulson by rivals Goldman Sachs a year earlier.

Paulson had left in the interim to become the Treasury Secretary for George W Bush – and would be later remembered for overseeing the US$700 billion bank bailout of 2008. In 2006, though, with the banks still outwardly thriving, his successor Lloyd Blankfein walked away with a bonus of US$53 million. Enough to make Bob Cratchit eat his hat.

Cook earned US$135 million in 2018

The year 2018 was a good one for Tim Cook. Apple released three new iPhones, the iPad Pro, the new Apple Watch Series 4, and the company’s CEO took home US$135 million in earnings – not bad for someone on a base salary of US$3 million.

In fairness, Cook’s bonus was only US$12 million, with the bulk of his take-home pay coming from shares worth US$120 million, part of a 10-year stock award he had agreed on back in 2011. He must have had an inkling that Apple was going to do alright.

US$300 million bonus before Lehman Bros collapse

As the Global Financial Crisis was raging and Wall Street was about to crumble spectacularly, it was widely reported that a trader had picked up a bonus of US$300 million – still believed to be the biggest bonus of all time. It was, in fact, a loyalty bonus from a leading hedge fund to prevent the 38-year-old trader from leaving to start his own company.

Adam Levinson was working for Fortress Investment Group at the time and the New York-based trader was quoted as saying “I’m worth it”. It appears Levinson is still doing pretty well – in 2019 he bought a mid-century modern Bel Air house for US$20 million from his neighbour across the street, fashion designer Tom Ford.

And he did leave Fortress despite the bonus, now running his own company Graticule Asset Management Asia, with offices in New York, San Francisco, London and Singapore.

Prime Minister’s bonus for doing his job

While public servants obviously don’t score the big bucks that private businesses do, Australia Prime Minister Scott Morrison earns the equivalent of US$400,000 per year as Prime Minister – that’s around US$150,000 he receives as a member of parliament, and a bonus of almost 170 per cent for being the PM.

Why do Companies Give Christmas Bonuses?

Awarding holiday bonuses is a great way to make your employees feel valued. Giving holiday bonuses is a great way to make your staff feel valued and supported as the year wraps up. When most people think of a holiday bonus, money comes to mind.

However, there are other types of holiday bonuses. If you are thinking about awarding holiday bonuses, it is important to give it careful thought and planning. Be sure you understand the different types of bonuses, how they’re taxed and the benefits of awarding them to employees.

A holiday bonus is a gift given by an employer to an employee during the holiday season. A holiday bonus can be a physical gift, extra days off or, most commonly, a monetary payment. Holiday bonuses differ from year-end bonuses, because for year-end bonuses, an employer typically considers the employee’s years of service, base pay or performance level, whereas holiday bonuses are usually given out equally to all employees.

Holiday bonuses have many benefits for both your employees and your business.

Increased morale

The biggest benefit of giving holiday bonuses is that it makes people happy. A holiday bonus, whether it’s a large check or a couple of extra days off, shows employees that you are thinking about them and consider them valuable to the company.

Bonuses also ensure that employees are rewarded for their hard work, which decreases the possibility of burnout. Happier employees are more likely to stay with your company over the long term, decreasing costly turnover.

Higher engagement and productivity

When employees are happy, they’re often more engaged and productive. A 2019 study by Oxford University found that happy employees are 13% more productive, and a good way to make them happy is through extra compensation or other rewards. Studies also have shown that engaged employees produce better work.

If you choose to tie bonuses into yearly performance or goals, employees can be highly incentivized to hit those goals throughout the year. This can also help boost your company productivity and performance even outside of the holidays.

How Many Companies Give Christmas Bonuses?

Christmas bonuses are increasingly common, and few companies offer non-performance-based holiday bonuses.

For contracted employees, Christmas bonuses payments largely depend on the contract term. In cases where employees have bonuses based on target achievement stated in the contract, employees should be paid when they achieve their targets unless they agree to adjust their rights to get the incentive or agree to get only a part of it.

There are no standard set rules for Christmas bonuses, but these guidelines are often what employers use to determine holiday bonuses.

Communication

In circumstances where your company has previously offered bonuses to the employees but won’t issue one for the year, they should inform employees as soon as possible. Many employees rely on that bonus and consider it part of their income when creating a budget.

Fairness

Employers should consider a fair and equitable distribution in addition to consistency and uniformity. This means letting no employee feel shortchanged unfairly and remembering to include everyone. Even if the budget doesn’t allow monetary gifts, employers might consider gifting time off or additional vacation days.

Professionalism

Despite the holidays being festive, everyone must remain professional. This means no harmful or inappropriate gifts — things that are considered NSFW or “not safe for work,” in other words. It’s also a time to set aside any personal feelings for employees unrelated to work performance when giving out monetary bonuses.

Confidentiality

Holiday bonuses should be treated like employees’ salaries and not be disclosed to anyone outside the payroll processing. Holiday bonuses are tokens that employees can celebrate, enjoy and not compare with others.

Transparency

Many companies give yearly performance-based bonuses. These bonuses are typically developed to motivate employees to achieve year-end goals. Employers should clarify and be open about which additional money is a Christmas bonus compared to a year-end performance bonus if both are provided.

Can I Withdraw InstaForex Bonus?

Principles of bonus program

• 1. InstaForex StartUp Bonus is a no deposit bonus. Every new Client of the Company has the right to get this bonus.

• 2. When opening an account to which InstaForex StartUp Bonus will be credited, the Client is required to specify his/her ID data. Once the Bonus is credited, it is prohibited to change personal data entered in the Full Name field.

• 3. The bonus funds are not available for withdrawal. However, profit gained from trading the bonus funds can be withdrawn if all terms stated in this Agreement are fulfilled.

• 4. InstaForex StartUp Bonus is meant for a Client to start trading on Forex. As soon as the Client’s account is deposited with real money, the Bonus will be canceled in full.

• 5. The Client agrees that the account credited with InstaForex StartUp Bonus will be converted into a demo account in case no deposit is made within 7 days since the Bonus is received. Afterwards, both InstaForex StartUp Bonus and profit gained from trading the Bonus funds are considered to be virtual money.

• 6. If the Client replenishes the account credited with InstaForex StartUp Bonus, profit gained from trading this bonus means is converted into the bonus worth 100% of a deposit amount. Moreover, the bonus for the first deposit equals 110% on condition that the Client earns a 10% profit from trading InstaForex StartUp Bonus and makes a deposit within 7 days since the Bonus is received.

• 7. The terms and conditions for the 100% StartUp Bonus are set out in this Agreement.

• 8. The Client agrees that all ongoing trades in the Account are closed as soon as the Account has been deposited with cash.

• 9. The Client agrees that profit in the account credited with the InstaForex StartUp Bonus are distributed proportionally between the real deposited funds and the profit from the 100% StartUp Bonus in the account. At the same time, a part of the profit proportional to the bonus amount can be temporarily limited for withdrawal until a particular number of lots are executed in accordance with clause 11 of this Agreement.

• 10. Neither InstaForex StartUp Bonus nor the 100% StartUp Bonus can be invested in PAMM accounts, but both can be used to copy trades in the ForexCopy system.

• 11. The 100% StartUp Bonus can be withdrawn provided that the Client executes BUY or SELL trades which total X*3 InstaForex lots, where X is an amount of the Bonus credited. A Bonus profit can be withdrawn after the Client executes BUY or SELL deals which total Y*3 InstaForex lots, where Y is a profit share proportional to the Bonus. In order to withdraw both bonus funds and profit gained from a trading account, the Client should send a request following the link in Client Cabinet. The link will appear as soon as the Client has executed the required number of lots. The Company reserves the right to reject the request for bonus withdrawal without explaining the reason.

• 12. The Client agrees to receive information about the Company’s services on the email provided when the bonus account was registered.

• 13. Regardless of a trading result in the account credited with InstaForex StartUp Bonus, the Client has the right to open a different account with the Company and receive a 30% Welcome Bonus for every deposit in a new account.

• 14. The Company reserves the right to amend or supplement the terms of the bonus program without prior notice.

• 15. The official language of the Agreement is English. In case of differences between the Agreement in English and a translated version, the Agreement in English is considered to be a prior reference standard.

How Much Bonus is Normal?

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.

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.

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.

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.
• 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.
• 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.

Can You Give an Employee a Bonus Without Taxes?

When you are paying employee bonuses, it is important to understand how they should be taxed. Yes, employee bonuses are considered taxable income.

In the eyes of federal and state tax authorities, employee bonuses are another form of employee income, so as with the standard wages you pay your employees, any bonuses you give your employees are taxed. However, bonuses are taxed differently than standard wages, because the IRS classifies bonuses as supplemental wages.

There are three types of taxes an employer must pay on employee bonuses: federal bonus taxes, additional federal taxes and state taxes.

Federal bonus taxes

As previously stated, the federal bonus tax rate is 22%. However, federal bonus taxes work a bit differently depending on when they are given to employees. If you issue bonuses via paychecks that are entirely separate from your employees’ usual paychecks, you withhold taxes at the federal 22% flat rate.

This is called the percentage method. If you add your employees’ bonuses to their next regularly scheduled paycheck, you use the aggregate method. We’ll explain more about each of these methods below.

Additional federal taxes

In addition to the federal bonus tax, bonuses are subject to Social Security and Medicare (FICA) taxes. As with standard wages, the 2020 Social Security tax rate on bonuses is 6.2% on the first $137,700 you pay each of your employees.

Likewise, the 2020 Medicare tax rate is 1.45% on all wages, including bonuses, under $200,000 and 2.35% for any wages above $200,000. In many cases, for bonus withholding calculations, you can use the cumulative Social Security and Medicare tax rate of 6.2% + 1.45% = 7.65%.

State bonus taxes

After you calculate how much federal bonus tax and FICA tax you should withhold from the bonuses, you should calculate the state bonus tax. This is typically the final tax in the process.

Most, but not all, states assess taxes on bonuses. Some states even have different bonus tax rates for different types of bonuses. In California, for example, the state supplemental wage tax rate is 6.60% and increases to 10.23% on bonus and stock options. Additionally, in Maryland, you’ll need to add your local tax rate to the 5.75% state bonus tax rate before calculating how much state bonus tax you must withhold.

How to Calculate Bonus Taxes

Now that you know the types of bonus taxes you’ll need to withhold, you need to be clear on how to do the proper calculations. After all, as previously mentioned, you calculate bonus tax withholding differently if you pay your employees bonuses as separate paychecks instead of as additions to regularly scheduled paychecks. In the first case, you’ll use the percentage method, and in the second, you’ll use the aggregate method.

Tax liabilities and the percentage method

For example, let’s say your company is based in a Colorado city with no local bonus tax and you pay an employee a $1,000 bonus that is delivered via a check or direct deposit separate from a regularly scheduled employee payment. In this case, you calculate the federal bonus tax using the percentage method.

Start with the 22% federal bonus tax:

$1,000 x 0.22 = $220 in federal bonus taxes

Next, calculate the FICA tax withholding:

$1,000 x 0.0765 = $76.50 in FICA taxes

Finally, calculate the state bonus tax withholding using Colorado’s 4.63% state bonus tax rate:

$1,000 x 0.0463 = $46.30 in Colorado state bonus taxes

When you add all of the bonus tax liabilities together, here’s what you get:

$220 + $76.50 + $46.30 = $342.80 in total bonus taxes

As such, the bonus you issue to your employee will ultimately not be $1,000, but instead $1,000 minus $342.80, which equals $657.20.

Tax liabilities and the aggregate method

Let’s again say your company operates in a Colorado jurisdiction with no local bonus tax. If you pay that same $1,000 bonus to an employee as part of a regularly scheduled paycheck instead of as an entirely separate payment, you calculate your federal bonus tax using the aggregate method.

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In the aggregate method, the 22% federal bonus tax rate never comes into play. Instead, you use standard federal income tax tables to calculate the tax withheld from the bonus you’re paying. So, if you give this $1,000 bonus to an employee whose monthly salary is usually $6,500, you’re effectively paying this employee $7,500 for the month.

As such, the employee’s effective yearly salary for the month isn’t their usual $6,500 x 12 = $78,000. Instead, it’s $7,500 x 12 = $90,000.

Whereas the employee’s standard $78,000 annual income translates to a federal income tax rate of 22% (assuming the employee is a single filer who isn’t the head of a household), their $90,000 effective yearly salary with the bonus falls into a higher federal income tax bracket for which taxes are assessed at a 24% rate. This is the rate at which you’ll withhold taxes on the bonus you’re paying.

As such, your federal bonus tax withholding isn’t $220 as in the previous example. Here’s how to calculate it:

$1,000 x 0.0024 = $224

The FICA tax and state bonus tax calculations remain the same.

Notice that the aggregate method required much more work for a $4 increase in federal bonus tax from the percentage method. Because the aggregate method can result in higher bonus tax withholding and is more tedious to calculate, many employers prefer the percentage method.

Of course, you can’t use the percentage method if you pay bonuses alongside standard paychecks. So, if you’d rather save time on calculating taxes, pay your bonuses separately from your paychecks.