Skip navigation


December 13, 2019 Previous day Next day

As the holidays approach, your employees may have visions of bonus checks dancing in their heads. But whether or not to give your small business employees a holiday bonus depends on several factors, including your employees’ expectations, your own generosity and your business’s financial situation.

Here’s what to consider when deciding whether to give out bonuses.


Meeting Employee Expectations adult-birthday-birthday-gift-box-360624.jpg


A previous employer taught me that once you start giving holiday bonuses, you can’t stop. What’s more, you need to keep the bonuses at a comparable level from year to year. If you give everyone a $1,000 cash bonus three years in a row, then suddenly drop to a $25 Starbucks gift card the fourth, you won’t win any fans among your staff.

If this is the first year you will be giving employee bonuses, set reasonable expectations. Even if your business is having a great year, huge bonuses can set a bar you may not be able to meet going forward.


Consider starting with a small, base bonus you feel confident you can continue offering in the coming years. Then add extras, such as gift cards or holiday turkeys, depending on company performance.


How to Give Holiday Bonuses


While performance bonuses are often reserved for managers, holiday bonuses should be given to everyone. If you feel certain levels of workers deserve bigger bonuses, you should still make the amount consistent. For example, you could give everyone a cash bonus that’s a percentage of their salary or equivalent to a week’s pay.

Unlike performance-based bonuses, holiday bonuses should have no strings attached. They’re simply a gesture of goodwill and a way to spread holiday cheer.

If you do give out performance-based bonuses, consider doing so in January to keep them separate from holiday bonuses.


What to Give as a Holiday Bonus


There are several options for holiday bonuses; consider one or a combination of these.


  • Cash: Cash is king for the holiday bonus. Everyone can use cash and employees will appreciate a little extra help paying for holiday gifts. 29% of business owners look forward to providing employees holiday perks or bonuses says BofA’s 2019 Fall Small Business Owner Spotlight.
  • Gift cards: When giving gift cards as part of your bonuses, look for those that appeal to the widest possible audience. For example, everyone needs to buy food, so grocery store gift cards are a good bet. Gift cards to Amazon, Target or similar major retailers are also likely to be appreciated. You may be able get gift cards at a discount online or at membership discount stores.
  • Time off: If your budget, industry, and business allow for it, consider closing your office the week before New Year’s while still paying employee salaries. Your team will come back rested and ready to work. If that’s not realistic, giving employees a day or two off with pay, or letting them leave early on Fridays during December, is a nice reward to help them manage their holiday schedules.


Giving a holiday party or giving employees gifts are nice gestures, but they don’t really replace the holiday bonus. A party is more of a group celebration, and gifts may miss the mark. A holiday bonus, in contrast, is sure to be appreciated.


How do you plan to reward your employees this holiday season?


About Rieva Lesonsky


Rieva Lesonsky is CEO and Co-founder of GrowBiz Media, a custom content and media company focusing on small business and Rieva+Lesonsky+Headshot.pngentrepreneurship, and the blog A nationally known speaker and authority on entrepreneurship, Rieva has been covering America’s entrepreneurs for more than 30 years. Before co-founding GrowBiz Media, Lesonsky was the long-time Editorial Director of Entrepreneur Magazine. Lesonsky has appeared on hundreds of radio shows and numerous local and national television programs, including the Today Show, Good Morning America, CNN, The Martha Stewart Show and Oprah.


Lesonsky regularly writes about small business for numerous websites and for corporations targeting entrepreneurs. Many organizations have recognized Lesonsky for her tireless devotion to helping entrepreneurs. She served on the Small Business Administration’s National Advisory Council for six years, was honored by the SBA as a Small Business Media Advocate and a Woman in Business Advocate, and received the prestigious Lou Campanelli award from SCORE. She is a long-time member of the Business Journalists Hall of Fame.


Web: or Twitter: @Rieva

You can read more articles from Rieva Lesonsky by clicking here


Bank of America, N.A. engages with Rieva Lesonsky to provide informational materials for your discussion or review purposes only. Rieva Lesonsky is a registered trademark, used pursuant to license. The third parties within articles are used under license from Rieva Lesonsky. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.


Bank of America, N.A. Member FDIC. ©2019 Bank of America Corporation

Filter Article

By tag: