How to calculate bonus pay

To do this you must first consider all employee salaries and wage amounts. You can use the previous year's wage estimate, if necessary. Then base the bonus on the amount each employee makes.

Next, you determine a specific employee's salary, determine a percentage, and multiply the employee's salary by that percentage.

Sales commission bonus pay

This method is often used by companies that want to incentivize sales, meaning this is a performance-based bonus. To determine the proper bonus amount, multiply the amount earned by a specific employee by the bonus percentage. It breaks down like this:

• Figure out the total sales made.

• Determine a total bonus percentage.

• Multiply the total sales of an employee by the bonus percentage.

Sign-on bonus pay

This type of bonus happens when an employee is hired and does not usually require any calculations. Unless the employer is doling out the bonus in increments, to do this, the employer must determine a proper contract length, and divide that number by the amount of the bonus.