Home
Back
Prorated Bonus Formula:
| From: | To: |
The Prorated Bonus Calculator calculates the portion of an annual bonus an employee would receive based on the number of months worked during the bonus period. This is particularly useful for employees who join or leave a company partway through a bonus year.
The calculator uses the prorated bonus formula:
Where:
Explanation: The formula calculates what portion of the full annual bonus an employee should receive based on the fraction of the year they worked.
Details: Accurate prorated bonus calculation ensures fair compensation for employees who don't work a full bonus period and helps companies maintain equitable compensation practices.
Tips: Enter annual salary in dollars, bonus percentage (without the % sign), and number of months worked. All values must be valid positive numbers.
Q1: When is prorated bonus typically used?
A: Prorated bonuses are commonly used when employees start or leave a company mid-year, take extended unpaid leave, or change roles with different bonus eligibility.
Q2: Are there different methods for prorating bonuses?
A: While the months-worked method is common, some companies may use days worked or other formulas. Always check your company's specific policy.
Q3: How is the bonus percentage determined?
A: Bonus percentages are typically based on company performance, individual performance, or a combination of both, as defined in employment contracts or company policies.
Q4: Are prorated bonuses taxed differently?
A: Prorated bonuses are typically taxed as ordinary income, similar to regular bonuses, following the applicable tax regulations in your jurisdiction.
Q5: Can this calculator be used for any currency?
A: Yes, the calculator works with any currency as long as you consistently use the same currency for both salary input and bonus output.