How to calculate bonus

Determining your bonus is usually based on two things. Your total salary or yearly wage you earn, and some percentage of that salary. The total percentage you earn is usually a combination of a flat bonus and a performance bonus. This performance bonus is determined based on your work performance of the last year, and is typically decided by your superior.

For example, lets say you earn $50,000.00 per year. You have a flat bonus of 5% and up to an additional 10% based on performance. Your supervises decides you’ve performed adequately but did not go above and beyond expectations. Therefore, you receive a 7% additional bonus for a total of 12%. Next, you need to multiply your total salary by 12% to get your bonus.

$50,000.00 * .12 (12%) = $6,000.00

Keep in mind that this bonus is before taxes. You will need to pay taxes on this if your company doesn’t do so for you.

Bonus Calculator

To make things easier we created this bonus calculator. Enter your total yearly salary, and your flat bonus + performance bonus to calculate your total yearly bonus ($).

If you are not sure what your annual salary is, you can use our salary calculator here.

It’s important to understand both your yearly salary and bonus, so you can double check that you’re employer is living up to their promises. Often times employers will use tricky wording in order to manipulate how much bonus you receive. Understand number can help reduce and confusion.

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