Bonuses are salaries, etc. paid separately from regular salary, and include those paid under the names of bonuses, bonuses, summer allowances, year-end allowances, end-of-term allowances, etc., and similar items. In addition, if it is unclear whether a salary, etc., has the nature of a bonus, the following items will be considered to be bonuses:
(4) Salaries as stipulated in Article 34, Paragraph 1, Item 2 of the Corporation Tax Law (predetermined and notified salary) (excluding those paid based on the india telegram phone number list provision that a fixed amount is paid continuously at a specified time each year to those who do not receive other regular salary);
(5) Performance-linked salary as stipulated in Article 34, Paragraph 1, Item 3 of the Corporation Tax Law
Citation: National Tax Agency | No. 2523 Withholding tax on bonuses
In many companies, bonuses are generally paid twice a year as summer and winter bonuses. In addition, bonuses may be paid on an ad-hoc basis depending on business performance, and the frequency and timing of bonuses vary from company to company. The
biggest feature of bonuses is that the amount is determined based on the company's performance and the contribution of each employee. Not everyone receives the same amount, and it can vary greatly depending on individual performance and the company's performance. In addition, the presence or absence of bonuses and the amount of bonuses paid vary greatly depending on the company's policies and work regulations. Therefore, it is important for employees to carefully check their company's rules in advance.
Bonuses are often a very large source of income for employees and are an important factor in household finances and savings plans. Bonuses also increase employee motivation, making them an effective compensation system for companies.
[By type] Bonus system
[By type] Bonus system
There are three basic types of bonuses: "basic salary-linked," "performance-linked," and "financial year-end bonus."Each has a different purpose and calculation method, and it is up to each company to decide which type to adopt. Here we will take a closer look at these three types.
Bonus type Main features merit Disadvantages
Bonus linked to base salary The amount of payment is determined based on the base salary Stable and predictable pay for employees Individual achievements are not easily reflected
Performance-based bonuses The amount of payment is determined according to the performance of the company, department, and individual. The results are reflected and employee motivation increases Depending on performance, the amount of payment may be reduced or not paid at all.
Settlement bonus The amount of payment is determined based on the company's profits at the end of the fiscal year. Distributed fairly based on the profits of the entire company No payment will be made in years with no profits
Bonus linked to base salary
A basic salary-linked bonus is a system adopted by many companies. It is a system in which a bonus is paid based on a certain number of months' worth of basic salary.For example, if an employee with a base salary of 300,000 yen receives a two-month bonus, the bonus amount will be 600,000 yen.
A base salary-linked bonus provides employees with peace of mind because the amount of compensation for each employee is clear in advance. It also has the advantage of making it easier for companies to manage budgets and plan expenditures.
However, this method also has its challenges. Since it does not necessarily reflect individual performance or achievements, it can feel unfair, especially to outstanding employees.
Performance-based bonuses
A performance-linked bonus is a system in which the amount of payment varies based on the performance of the entire company, department, or even an individual.With this system, if the company's overall performance is good, the payment amount will increase, but if the performance is poor, the bonus may not be paid at all. In addition, by evaluating the performance of each individual, it is possible to receive compensation according to their performance.
This system is a chance for employees who have achieved particularly good results to receive large rewards, which leads to increased motivation. However, depending on the performance of the entire company, even excellent employees may have their bonuses reduced or not paid, which is an unstable aspect and involves risks. In particular, in industries that are easily affected by the external environment, corporate performance may suddenly deteriorate, so it is necessary to consider not only individual performance but also the overall situation.
