When’s the best time to give employees holiday bonuses?
Yes, I know that the holidays were last month, and this article is kind of late.
No, I don’t care.
I’m writing this article the month before it’s going to publish, as I frequently do. It’s currently the week of Christmas, but this article probably won’t post until some time in January.
As a management consultant, part of my job entails, among other things, instructing clients on improving employee morale. Around the holidays, the subject of holiday bonuses for employees is usually something that comes up with clients. I’m a firm believer in taking care of your employees, and giving them a holiday bonus is a great way to show them some appreciation at the end of the year.
For most of my life, I worked menial jobs that paid like shit and worked me like a dog. Things like weekends and holidays off were unthinkable, as were holiday bonuses. I even had to work Christmas Day. The closest thing I ever received to a holiday bonus was when the Jewish deli I worked for allowed me to take home a loaf of rye bread that didn’t sell on Christmas Eve. In National Lampoon’s Christmas Vacation, Clark gets a subscription to the Jelly of the Month Club instead of money, and it’s treated like a travesty. I’d have been grateful for getting a subscription to the Jelly of the Month Club, it was better than getting absolutely nothing (and would have went well with my rye bread).
My time at ShopRite was similar. Holidays just meant more work for the same pay. They finally started giving their employees small bonuses last year, about five years after I left.
The job I worked between the Jewish deli and ShopRite, a company called American Food and Vending, announced pay freezes a week before Christmas while I was there.
It wasn’t until 2019, when I took a job in medical manufacturing, that I received my first holiday bonus. It was one week’s pay, about $700 give or take. Coming from pay freezes and loaves of rye bread, this was like striking gold for me. The place ran on nepotism and billing fraud, but the fact that they gave their employees a bonus was one of the things I really appreciated about that job.
When we launched our current company, we made sure to give the employees a holiday bonus. As CEO, I believe that the employees are the pillars that support the company, and they should be taken care of. After all, the company couldn’t function without them.
We gave our employees their holiday bonuses on December 5th. Our rationale behind this was that the bonuses would go towards Christmas shopping for family and friends. Many companies do it this way for this same reason. I’ve even heard of companies giving out their bonuses as early as Thanksgiving so employees can have it in time for Black Friday.
In 2024, I managed to convince a particular client to start giving their employees holiday bonuses. The company had reported record profits and even opened a couple more locations with plans to open more in the coming years, but employee morale was in the dumps. Common complaints were the usual, understaffing, low pay, and just general feelings of not being appreciated by the owners and upper management. Now, this wasn’t an industry where the rank and file employees deserved to be making $50 an hour or anything, but the company could have definitely been paying them more. I haven’t been able to get them to budge on wages, but I was able to sell them on giving their employees holiday bonuses.
The bonuses weren’t much, about $100 for each employee. But for employees who were living paycheck to paycheck and making an average of $13-$15 an hour, it was a start. Of course, many of them still grumbled that the company could have given them more (I agree), but many of them also genuinely appreciated the gesture, since the company had never done this before in its 50+ year history. Baby steps, right?
Flash forward to today. I recently had a conversation with that same client, and the bonuses came up. I asked if they were still doing the bonuses for 2025, given that it went over pretty well the previous year. The client said yes, they were set to give them out on Christmas Eve.
Say what?
I explained to the client why this wasn’t a great idea, and why it would be more beneficial to give out bonuses earlier. Aside from my point about using holiday bonuses for Christmas shopping, a lot of employees would also have to wait to cash the checks since banks usually have reduced hours on Christmas Eve, and if you’re depositing the check most banks take a few days to clear it.
The client very obviously didn’t care about this, because their best rebuttal was “It’s a holiday bonus, that’s why we give it out on Christmas Eve.”
I’m going to go out on a limb and assume that the actual reason was most likely so they could milk a bit more interest from the money first.
I didn’t press the issue. I’m there to advise the client, not run their company for them, so all I can do is give them my advice. It’s up to them to follow it, and it’s on them if they choose not to and it doesn’t pan out. Either way I still get paid my consultancy fee.
But the client’s decision to wait until Christmas Eve got me thinking. I was curious to see what the general consensus was on when the best time to give out holiday bonuses, so I turned to the court of public opinion, AKA Google.
The results were surprisingly divided.
A lot of people had the same mindset as me, give the bonuses out at the beginning of December so employees can use them for Christmas shopping. But a surprisingly large amount of people saw it the same way as my client, that it was a holiday bonus and therefor should be given out closer to the holiday, at some point during the last two weeks of December. At this point you’re basically just arguing semantics and, in my opinion, missing the spirit of what a holiday bonus really is.
The other argument in favor of giving the bonuses out later had more to do with the accounting side of things. The rationale here was that it ties in to the company’s year-end reporting, and the company has a more accurate picture of their 4th quarter numbers at that point.
Now, I don’t handle the financial aspect of the company (I leave this in the highly bitchy yet highly capable hands of Stephanie), so I might be talking out of my ass on this one. But if you don’t have a general idea of how your 4th quarter is going to end by the first or second week of December, then chances are that either your accountants don’t know what they’re doing or you’re grossly mismanaging your company somehow. If the last three weeks of the year make or break your company’s finances, then there’s a huge problem.
Some companies have taken this logic a step further and don’t give out bonuses until January or February. This seems to be more common in industries where the bonus is performance-based (like sales), so I guess it makes sense to wait until the final quarter is complete before calculating the person’s bonus. For anyone else though, I think that this is silly and impractical. If the bonus isn’t contingent on numbers then why wait?
So if you’re giving out holiday bonuses, it might be wise to consider the timing of when you give them to your workers. I’d say that no later than the second week of December, since it gives them time to put the money towards their gift shopping. The closer you get to Christmas the harder it becomes for them to do this. It seems like such a small and simplistic thing, but I think that most employees would appreciate that extra boost during one of the most stressful times of the year.
I’m curious to hear what others think on this. Would you rather get a holiday bonus closer to Christmas Day, or earlier in the month? Feel free to leave your hot takes in the comments.
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