Payroll costs
Company-Specific Allowances and Bonuses
1. Definition
Company-specific allowances and bonuses are fringe benefits that the employer establishes on its own initiative, beyond what is required by law or collective bargaining agreements.
The term “company-specific” should be understood to mean “belonging to the company”: these elements are unique to the company and constitute its compensation policy.
2. The Principle: Freedom, Subject to One Condition
The criteria and terms for granting these benefits are at the employer’s discretion, subject only to the condition that they constitute compensation.
The rule is brief, but it articulates two opposing ideas.
| What the rule says | |
|---|---|
| Discretion | The employer decides the criteria, who is eligible, and the terms: how the benefit is granted |
| The limitation | These benefits must be considered part of compensation |
What this condition actually means: The employer is free to create the benefit, choose its recipients, and determine how it is calculated. The employer is not free to structure it in an arbitrary or opaque manner.
A benefit that does not have the nature of wages is not a component of compensation: it is a gratuity, a discretionary gesture, which does not establish any right and is not part of any policy.
The requirement is therefore not a constraint imposed from outside: this is what distinguishes a compensation policy from a series of one-off gestures.
3. The Three Criteria for Wage Status
Three criteria, which must be met cumulatively. Each addresses a different question.
| The criterion | The question it poses | What it requires | |
|---|---|---|---|
| 1. | Generality or homogeneity | Who benefits from it? | All employees, or a homogeneous group among them |
| 2. | Fixed or constant | How much? | A clear and consistent amount or calculation formula |
| 3. | Permanence or continuity | When? | A pre-established frequency known to everyone |
3.1 Universality or uniformity: the “who”
The benefit must apply to all employees, or to a homogeneous category of them.
This is the criterion that rules out case-by-case allocation. A benefit reserved for a few individuals selected on a case-by-case basis does not define a category: it merely designates beneficiaries.
The category must be based on an objective criterion—such as position, level of responsibility, work location, or working conditions—and not on an assessment of any particular individual.
3.2 Fixed or Consistent: The “Amount”
The amount, or the calculation formula, must be clear and consistent.
Be careful not to confuse consistency with uniformity. The criterion does not require that the amount be identical from one month to the next. It requires that the rule be consistent.
A bonus calculated as a percentage of a result will necessarily vary in amount but will still satisfy the criterion, provided that the formula is known and does not change.
What is prohibited is not variation—it is arbitrariness.
3.3 Permanence or Continuity: The “When”
The frequency must be predetermined and known to all.
Two requirements in one:
| The requirement | |
|---|---|
| Pre-established | The schedule is set before payment, not decided on a case-by-case basis |
| Known to everyone | Beneficiaries know when the benefit will be paid to them |
4. What the three criteria have in common
Taken together, they define a single requirement: predictability.
| The criterion | What makes it predictable |
|---|---|
| General nature | Who is eligible |
| Stability | How much will be paid |
| Continuity | When It Will Be Paid |
A benefit for which the “who,” “how much,” and “when” are known constitutes a component of compensation. A benefit for which one of these three factors depends on a case-by-case decision is a gratuity.
This explains why the condition set forth in the text does not actually restrict the employer’s freedom: it simply requires the employer to formalize their decisions. The content of the policy is up to the employer; its clarity is not.
5. The Practical Implication
Establishing a custom benefit therefore amounts to answering three questions in writing before the first payment is made:
| The Issue to Be Decided | |
|---|---|
| 1 | Which category of employees is eligible, and what objective criteria define this category? |
| 2 | What is the amount, or what is the calculation formula? |
| 3 | How often will the benefit be paid? |
Three written responses are sufficient to classify the benefit as part of the salary. Failing to provide them produces the opposite effect of what was intended: by thinking they are maintaining flexibility, employers create a benefit whose nature is unclear to both them and their teams.
The Essentials in 5 Points
- Employer-specific allowances and bonuses are benefits that the employer establishes on its own initiative.
- The employer is free to set the criteria and terms for granting them, subject to a single condition: that they be considered part of salary.
- Three cumulative criteria determine this: universality, fixed nature, and permanence. A benefit that meets all three criteria is included in the contribution base. The same characteristics that make a bonus transparent also make it subject to contributions.
- They answer three questions: who, how much, and when, and can be summarized in a single requirement: predictability.
- Consistency refers to the rule, not the amount: a variable bonus calculated according to a known formula satisfies the criterion.