Some employees in Barbados will be taking home their traditional Christmas bonus this year.
However, the message of Nicholas Roberts, president of the Human Resources Association of Barbados, to employers is that it will take more than an annual financial reward to keep their workers happy.
Whether it is cash, shares, vouchers, or financial incentives, Roberts said he was aware that several companies were still recognising the contributions of their employees at this time of year.
“I know companies still give a Christmas bonus, but, obviously, over the years, due to inflation and companies not doing as well as they say that they did in past years and that type of stuff, they have reduced either the bonus pool or how much it is that they give,” he said.
Roberts also recalled that there were some businesses which in the past gave their staff a ham or turkey, in addition to the extra cash. However, he noted that “if there are companies that are out doing it, they are in the exception, not the majority”.
“So I know bonuses are still given, but I know the bonus pool has reduced over the years. It is also discretionary and it is also based on how well the company performs,” he said.
“So if it is that the company said that they reached, for instance, 80 per cent target in 2023 and in 2024 they may have only reached 75 per cent so I know the bonus pay out can vary from year to year based on company performance and that type of stuff.”
Roberts said he was aware that companies were awarding staff in different ways.
“I know some companies give vouchers and that is also a good way to reward employees because
the [cash] bonus is taxable,” he said.
The Barbados Revenue Authority explained that bonuses, like overtime pay, is categorised as part of an individual’s pay packet and is, therefore, subject to income tax.
Bonuses are added to the employee’s weekly or monthly pay and their salary is then taxed at a rate of 12.5 per cent up to the first $50 000 of taxable income. Any income above $50 000 is taxed at the higher 28.5 per cent rate.
Roberts said one way some employees could avoid the bonus tax was via “spot bonuses” where workers were rewarded monetarily from as little as $50 to as much as a few thousand dollars, for example, “for working well on a project, or through a year, or giving good customer service”.
He added: “Also, I know some companies also give long service awards. Some companies give a monetary reward as well as a trophy or a plaque or something to congratulate people for their long service.
“So it usually occurs from five years, well up to 40 to 45 years, or whatever the case may be. Profit sharing is also big as well but that goes back to the type of company.”
Roberts stressed the importance of rewarding and recognising employee contributions.
“It is essential to the whole talent management process because different things motivate different people. So you may be motivated by money, someone else may be motivated by promotion, someone else may be motivated by just a good working environment,” he said. (SC)
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