When a team bonus should reflect pay levels, each person’s share is proportional to their salary. Someone who earns twice as much receives twice as much of the bonus.
The formula
Bonus for a person = Bonus pool × (their salary ÷ total salary of everyone in the scheme)
Worked example
A bonus pool of 10,000.00 EUR is shared between four people with monthly salaries of 4,200, 3,500, 3,000 and 2,800 EUR. The total salary is 13,500 EUR.
| Person | Salary | Share of total | Bonus |
|---|---|---|---|
| Anna | 4,200 | 31.11% | 3,111.11 EUR |
| Ben | 3,500 | 25.93% | 2,592.59 EUR |
| Chris | 3,000 | 22.22% | 2,222.22 EUR |
| Dana | 2,800 | 20.74% | 2,074.08 EUR |
| Total | 13,500 | 100.00% | 10,000.00 EUR |
Because each share is rounded to the cent, one share may be a cent higher than the exact figure so that the total stays at exactly 10,000.00 EUR.
Before you split
- Use the same salary basis for everyone: all monthly or all annual, all gross or all net.
- Decide who is in the scheme, for example whether people who joined during the year take part.
- If you think a pure salary split favours senior staff too much, a mix of equal and salary-based parts is a common compromise.
Common questions
Should I use gross or net salary?
Either works as long as everyone is measured the same way. Gross salary is the more common basis because it is the figure in contracts. Keep in mind the bonus itself is usually taxed when paid; check the rules that apply in your country.
What about someone who joined partway through the year?
A common approach is to reduce their weight in proportion to the months worked. For example, someone with a salary of 3,000 who worked 6 of 12 months can be entered as 1,500.
Can I split by grade or level instead of salary?
Yes. Switch the basis to Points and give each grade a number of points, for example 3 for senior, 2 for mid-level and 1 for junior.