Protection
Put yourself at ease by protecting those you love
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{{label}}13 December 2019
The word “bonus” is sure to make any employee’s eyes light up, as the word is often associated with getting some extra cash along with your monthly paycheck. You may be thinking about all the bills you can pay off, treating yourself to something nice as a reward, or setting the money aside for a time of need.
Sadly, taking the bonus as it is and spending (or saving) it without question may be making you miss out on crucial financial opportunities.
In this article, we’ll be answering the most common questions about company bonuses.
At their core, bonuses exist to reward or give incentives to a company’s employees. Some of these bonuses are:
Performance bonus
This bonus is based on either an individual’s performance rating as set by management or the overall financial goals of the company. Positive ratings are rewarded with an amount in addition to your basic pay. The amount given can depend on your current salary pay grade, the actual performance rating, or a combination of the two.
Sales commission bonus
For sales-related jobs, this bonus is to reward you for meeting your required sales numbers or going above and beyond your quotas. This can be gauged on either an individual scale or a team scale. Depending on your company, you may receive additional bonuses on top of the commission bonus.
Profit-sharing
For profit-sharing bonuses, the company sets aside a fixed amount in relation to the company’s current profits and distributes it amongst the employees. This is done in order to show how the company’s performance directly impacts all its workers.
Sign-on bonus
A sign-on bonus is given to new employees who have just joined the company to establish goodwill between the individual and the organization. This can also be provided to candidates to convince them to accept the company’s job offer alongside other benefits.
Referral bonus
This type of bonus is given to existing employees for referring a potential hire to the employer. Depending on the company’s needs, this can be for all positions or restricted to roles with limited pools of talent. This bonus is usually only granted after the candidate qualifies, signs the contract, and remains with the company for a certain amount of time.
Milestone bonus
Companies may reward the completion of specific projects or important milestone tasks with a gift. While only done rarely, this is one way to encourage meeting tight deadlines. Aside from completing tasks or delivering projects at a specific deadline, there can be other rubrics in play to qualify for the bonus.
“Just because” bonus
This group is for miscellaneous bonuses not included as part of a contract or the employee handbook that a company may give its employees. End-of-year or Christmas bonuses count as examples of these arbitrary bonuses. Given that they aren’t based on any stipulation, these may not come regularly, depending on the decision of management.
Non-cash bonus
The only outlier from the rest of the examples, non-cash bonuses are alternative ways for companies to show their appreciation and recognition of their employees’ achievements. Things like gift certificates, vacation trips, and other items of value can count as non-cash bonuses, as well as non-physical prizes like additional leaves.
What’s the difference between 13th Month Pay and a Christmas bonus?
While some people use the terms “13th-month pay” and “Christmas bonus” interchangeably, there is a clear difference between the two.
Under Presidential Decree No. 851, all rank-and-file workers are entitled to a year-end bonus equivalent to a 1-month basic salary (thus, 13th-month). This amount is pro-rated if you’ve been employed at your organization for less than a year.
Meanwhile, a Christmas bonus is an optional benefit given by certain companies, depending on the stipulations on their employee handbook or contract.
Am I eligible for a particular bonus?
Aside from government employees who need satisfactory performance ratings to qualify for the 13th-month pay, eligibility for bonuses can differ between companies and types of bonuses.
Don’t wait until the end of the year to find out which bonuses you are qualified for. Take the initiative to talk to your immediate manager or supervisor on the type of bonuses available for you, and how you can work towards qualifying for them.
Where should I spend my bonus?
It’s easy to imagine putting your bonus towards the latest trendy gadget or a trip abroad as a gift to yourself. However, putting your bonus—or at least part of it—in savings and investments will be a gift that keeps on giving, long after the bonus season is over.
Savings plans like BPI AIA's Build Life Plus provide both investment options and life insurance benefits that give protection for you and your loved ones while increasing your financial health.
At the end of the day, getting a better understanding of the bonuses available to you and how they work can play a significant role in increasing your financial security and stability. Talk to a Bancassurance Sales Executive at any BPI branch to find the perfect plan for your needs.