Making the most of your holiday bonus

Your Money Matters

Nearly 200 employees at a Maryland property company are getting a huge bonus this year. St. John Properties is dividing a $10 million bonus among the employees based on years of service.  The average employee is getting $50,000, some getting upwards of $250,000. 

While most end of the year bonuses aren’t quite that extravagant, there are ways to make the most of your holiday bonus. The type and amount of gift may vary, but its pretty common for companies to give their employees a little extra holiday cheer at the end of the year.

“We’ve always done some kind of a Christmas bonus for our employees,” Jim Mathis, the President & Founder of ADwerks said. “It has changed over the years, obviously if we’re having a good year, the Christmas bonuses are a little bigger, if we’re having a lean year, they’re a little smaller, but we’ve always tried to do something for our employees.”

“I think its important, even though it may not be thousands of dollars, it’s our recognition I think that matters to them,” Veterinarian Mike Bjorklund said.

“It definitely makes us feel like a big family, we’re a big organization, Avera is giant, we grow year after year, so its just knowing that we’re cared about,” Mallory Gross said.

“Its so nice, it goes for Christmas presents and it’s a little extra to help things along,” Sarah Rosin said.

The holiday season is an important time for families to get that extra financial boost, but its also good timing for businesses closing out the end of the year.

“For a lot of companies it’s a way to tax plan at the end of the year,” Jonna Meehan, Eide Bailly Senior Tax Manager said. “If they’re targeting a certain income, that bonus, or extra salary at the end of the year can get them where they want to be.”

Meehan says an important distinction to remember: even though that bonus is a holiday gift, its still considered part of your income.

“So you’re aware of that, it will show up on your W-2 when you go to file your taxes,” Meehan said.

But employers like Mathis say for him, the end of year bonus is all about giving back.

“I really do kind of think of our team as my family, so it’s a gift to them,” Mathis said. “I want to give them something to tell them thank you for their time and thank you for the hard work they’ve put into it.”

As far as what to do with that extra cash, many people end up using it to buy a little something extra for their family over the holidays or pay off those big holiday shopping bills, but it could also be an opportunity to put some extra money away into savings each year.

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