Make bonuses work for your business

Base bonuses on clear goals. Make the goals specific for the worker and beneficial to your company.

I recommend: American Express offers advice on why you should consider giving bonuses, how to be fair with bonuses, how much to pay and other nuances. The small business section of Salary.com can help you establish the right pay levels for all of the jobs at your business.

Keep the books on bonuses for tax purposes

Your accountant or bookkeeper will need to know whether the bonuses were discretionary – not required – or non-discretionary, or linked with a contract or promise. Keep good records of what you give and its value.

I recommend: The American Institute of Professional Bookkeepers offers guidelines for which bonuses are taxable and which are not.

Consultant compensation experts

If bonus and other compensation questions have you stumped, consider a compensation consultant.

I recommend: SalaryExpert.com has a wide range of helpful resources, including links to compensation consultants, job analysis software and resources, executive compensation surveys and more.

A variation: hiring bonuses

Studies indicate that half of all technology and life sciences companies – even small businesses – use a hiring bonus program to attract hard-to-find job candidates.

I recommend: Need to decide which types of employees to offer hiring bonus, typical amounts and how the bonuses are paid? Culpepper & Associates conducts regular surveys on salaries and bonuses.