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This is a common questions asked of the Payroll Professional and the simple answer is Yes and No!

As a rule of thumb, if a bonus is deemed part of your normal salary or wage package as outlined in your contract then the answer is Yes it should add to Gross for Holiday Pay calculations.

However, if the Bonus is deemed to be ‘discretionary’ in that it is not contractual, then it does not have to add to Holiday Pay calculations.

You should pose the question to your Payroll Department to see how they are handling Bonus payments (also Sales Commissions) as in practice many employers interpret this differently.

The Department of Labour has this to say on the matter, DOL Response.

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