BCH’s AMEN Corner – Affluent Minority Entrepreneur News
It’s a busy time of year and also a time for showing appreciation and giving back to employees and the community. Read on to learn approaches to employee bonuses, annual charitable giving, and giving back to the community during the holidays.
In the midst of all of the holiday celebrations in the next few months, we’re also thinking about how to recognize employees in a meaningful way. The last few years of managing a business through the pandemic has taken a toll on all of us. If you’re fortunate to have survived (and hopefully thrived!) it’s important to reward the team who helped you along the way.
Awarding year-end bonuses to employees is one way to show your appreciation for their hard work. It’s usually tied to an employee’s performance, reaching sales goals, or overall company performance. It’s usually given as a lump sum payment in December or even January if you want to delay the tax burden until 2024. A few facts about year-end bonuses and gifts, according to career resource Zippia:
- As of 2022, the average bonus pay in the U.S. is 11 percent of salary for exempt employees, 6.8 percent for nonexempt salaried employees and 5.6 percent for hourly employees.
- More than one-third or 33 percent of companies in the U.S. offer year-end bonuses. This is an increase of 3 percent from 2019-2020.
- Year-end bonuses are the most common type of bonuses in companies with 100 employees or less.
- 69 percent of employees like to receive a gift card, while 73 percent prefer a cash incentive.
Year-end bonuses may be calculated as a percentage of each employee’s salary or annual income. For example, if an employee earns $40,000 per year and the bonus percentage is 5 percent, the calculation would be: $40,000 x .05 = $2,000.
Another way to demonstrate the holiday spirit is giving back to the community through annual charitable contributions or volunteer efforts. According to Giving USA, they are seeing the following giving trends:
- In 2022, Americans gave almost $500 billion to charitable organizations, a 3.4 percent decline compared to 2021 when people increased donations during the pandemic.
- Individuals make up 64 percent of all giving and it declined 6.4 percent in 2022.
- Foundations accounted for 21 percent of all charitable giving.
- More than $1 of every $5 of charitable giving comes from foundations.
- Corporations also increased giving by 3.4 percent and that trend is expected to grow.
- Small businesses donate 2.5 times more to nonprofits than corporations.
- Small businesses give throughout the year by sponsoring annual events, offer in-kind expertise, provide employee volunteers and board service.
Experts recommend nonprofits focus on planned and legacy giving to prepare for the future. The “Great Transfer of Wealth” over the next few decades expect between $40 trillion to $140 trillion to be passed from one generation to the next. It’s estimated that up to one-third of this wealth will be transferred to nonprofits through planned giving. To truly make a bigger impact, we recommend you discuss planned giving strategies during the annual enrollment process for employee benefits.
We hope you enjoy this season of giving and receiving. As John F. Kennedy said paraphrasing Luke 12:48, “For of those to whom much is given, much is required.” We hope what you give to others comes back to you tenfold.
Last month, we asked, “How Confident Are You That Your Retirement Plan Will Support Your Retirement Years?” 33.33 percent of respondents are confident, and 66.6 percent are moderately confident.
We invite you to take part in this month’s poll. “Are You Planning to Give Company Bonuses This Year? If So, What is the Amount Based On?” Scan the QR code with your mobile device or click on the link below to participate. The results will be revealed in the next column. See you next month!