Guidelines for Domestic Staff Bonuses

The entire BAHS team wishes you a warm and happy holiday season! This week, we are sharing some bonus guidelines for those of you seeking to treat your staff, and a list of holiday resources of all types (everything from traveling with staff to dining out with children to planning a great party!).

Should I give a bonus to my staff?

Giving a bonus is common in the domestic staffing industry. This does not mean it is mandatory. We recommend offering a bonus to staff members that are performing well and who you intend to keep long-term. It’s lovely way to show your appreciation and support during the holiday season. We recommend being consistent year-to-year in terms of giving a bonus to each employee; if for some reason you cannot match previous years, we suggest having a conversation with the employee. An employee will typically see the bonus as an indication of their performance; if you give a lesser bonus to a high-performing employee, they may see it as a signal that they aren’t doing well. If that’s not the case, communication is key.

However, if one of your team members isn’t working out, we suggest having a clear and honest conversation with them about the problems; giving a bonus to an employee you don’t intend to keep on the team sends the wrong message and provides a false sense of job security.

Of course, if you’ve included bonus information in your employee’s contract, be sure to honor those terms.

How much should I gift?

We recommend anywhere from 1-4 weeks’ pay, depending on the employee’s performance and how long they have been employed in your home. 2 weeks’ pay is the average bonus for a domestic staffing employee.

Should I give other gifts in addition or instead of a bonus?

Gifts in addition to a bonus can be a welcome gesture. Nannies will love a framed photograph of themselves with the children or handmade cards from the little ones. Extra paid days off around the holidays to celebrate with family or in the new year to recharge are also a lovely way to show your appreciation.

I’m unable to give a bonus this year. What should I do?

If you are unable to give a bonus – or match last year’s – due to financial reasons, it is important to let the employee know so they don’t assume it is related to their performance. As with most things, misunderstandings can be avoided with early and open communication.

What are the tax implications for providing a bonus?

Per GTM: a holiday or annual review bonus is considered taxable income. As the employer is the provider, the bonus does not qualify as a gift in the eyes of the IRS.

Click here for more information on bonuses from our partner GTM.