Employee Bonuses — Rethinking Cash Incentives

Cash bonuses are ubiquitous, but tax-inefficient.

Employees can expect to lose 30% or more to taxes:

Companies pay standard payroll taxes on bonuses:

Overall, bonus payments can generate a 40% aggregate tax expense.

How can companies reorient bonus packages?

Retirement plan expansion is another bonus alternative.

Employee stock ownership plans also reward longevity.

Employee ownership offers incentives for all stakeholders.

ESOPs are valuable tools, but these incentive plans aren’t overnight solutions.

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