Payroll costs
6. Statutory bonuses and allowances
22 June 2026
A bonus is a reward granted to an employee in recognition of exceptional effort. An allowance compensates for a duty or constraint associated with the job. Bonuses and allowances may be statutory or contractual (mandatory), or regulatory (optional).
Abolition of a bonus established by custom
Where an employer intends to abolish a customary practice, they must follow a strict procedure comprising:
- Informing staff representatives;
- Informing employees individually;
- Compliance with a notice period sufficient to allow for any negotiations.
If this procedure is not followed, the established practice remains in force.