Updated: Aug 20, 2021

A payment to a firm’s employees additional to their normal pay. Bonuses may be linked to performance, of either the whole firm, a specified section of it. Or the individual recipient. Bonuses provide incentives to employees, both to exert themselves and to stay with the firm rather than look for a better job elsewhere. Bonuses differ from normal pay in that there is no obligation to repeat them, and they are not pensionable. They are normally taxable.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.