Bonus Plan Template
A bonus plan template to design a clear, fair variable-pay program — defining eligibility, targets, metrics, payout formula, and timing in one document.
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What you get
- A plan structure covering eligibility, targets, and metrics
- A weighted scorecard linking company, team, and individual goals
- A payout formula with funding gates and a multiplier table
- Governance terms for proration, timing, and plan changes
Template preview
The structure, not the finished file. The PDF and CSV carry the complete version.
Plan parameters
- Plan name & year
- Eligible population— roles, levels, or whole company
- Performance period— annual, semi-annual, quarterly
- Target bonus— % of base salary by level
Performance metrics & weighting
| Metric | Type | Weight | Threshold | Target | Maximum |
|---|---|---|---|---|---|
| Company revenue / EBITDA | Company | 50% | 90% of plan | 100% | 120% |
| Team / department goals | Team | 30% | |||
| Individual objectives | Individual | 20% |
Payout multiplier
| Performance vs target | Payout multiplier |
|---|---|
| Below threshold (<90%) | 0% |
| Threshold (90%) | 50% |
| Target (100%) | 100% |
| Stretch (110%) | 150% |
Payout calculation
- 1.Confirm the funding gate is met (minimum company performance)
- 2.Score each metric and apply its weight
- 3.Sum the weighted scores into an overall performance factor
- 4.Multiply: base salary x target % x performance factor = payout
Plan governance
- Proration rules for mid-year joiners and leavers
- Treatment of leave of absence and role changes
- Eligibility requirement to be employed on payout date
- Right to amend or discontinue the plan reserved by the company
The preview stops here; the template continues in the download.
How to use this template
- Set the structure. Define who is eligible, the target bonus as a percentage of salary, and the performance period.
- Choose metrics. Pick the company, team, and individual measures that drive payout and weight each one.
- Build the formula. Set funding gates and the multiplier table that converts performance into a final payout.
- Document the rules. Spell out proration, timing, and what happens on leave or exit so there are no disputes at payout.
Frequently asked questions
What is a typical target bonus percentage?
Targets scale with level: often 5-10% for individual contributors, 10-20% for managers, and 25-50%+ for executives. Set them against market data for comparable roles in your industry.
Should bonuses be tied to company or individual performance?
A blend works best. Company metrics align everyone to shared outcomes; an individual component preserves personal accountability. A common split is 50% company, 30% team, 20% individual.
Do I need a funding gate?
Yes — a minimum company performance threshold protects the business from paying out bonuses in a down year. Below the gate, payouts reduce or pause regardless of individual scores.