Bonus payouts in the US are becoming less common and smaller, even though many workers expect them to grow. A recent report from ADP looked at six years of payroll data and found that the median bonus amount dropped to $1,786 in 2024 from $1,857 in 2023. Meanwhile, fewer employees received bonuses last year, with only 39.7% getting one compared to 40.9% the year before.
The range of bonuses was wide, from no bonus at all to as high as $50 million. For most people, the bonuses fell between $600 and $6,500. Among employees who stayed with the same company for at least a year, bonuses grew modestly by about 1.3% from 2023.
Bonuses come in many forms, like performance rewards, sign-on incentives, and retention bonuses. These payouts happen throughout the year, with December being the peak month when 13% of employees receive bonuses. Some get theirs as early as November or January.
Despite the decline in bonuses, many workers still hope for bigger year-end bonuses. A 2024 study by Robert Half showed that 62% of employees expected their bonuses to be higher than the previous year. This gap between hopes and reality could cause problems for employers. Research from JobHire.AI indicates that 72% of employees lose trust in their employer when bonuses are cut or canceled. Nearly 25% of those affected have even chosen to quit their jobs. As one expert put it, trust is easy to lose and a canceled bonus can break a relationship fast.
For companies, planning year-end bonuses is a key part of managing payroll smoothly. Jen Leigh from Inflection HR says using payroll and compensation management software can help companies plan better by showing industry trends and helping manage budgets.
Some employers simply cannot offer bonuses because of financial limits. Artem Zakharov, CEO of JobHire.AI, advises that honesty is vital in these situations. Employees don’t mind if bonuses don’t happen, but they feel disappointed if the news is delayed or unclear. He also warns against promising to “make it up” next year, as this can hurt trust even more.
Zakharov suggests companies prepare managers for tough conversations and try offering other benefits instead of bonuses. Things like extra paid time off or the option to work remotely show employees that the company cares beyond just their work output.
As bonus payouts continue to slow, the way employers handle communication and alternatives could make all the difference in keeping workers engaged and loyal.