HR - Bonus Distribution Calculator.xlsx
Formula-driven | 5 sheets: README, INPUT, LOGIC, OUTPUT, CONFIG
What This Spreadsheet Solves
- Bonus distribution is ad hoc with no consistent methodology
- No way to verify that bonus amounts are fair across the organization
- Performance ratings do not proportionally influence bonus amounts
- Finance cannot audit how the bonus pool was allocated
- Managers distribute bonuses based on gut feel rather than criteria
Who This Is For
- Compensation managers designing bonus programs
- HR directors overseeing annual bonus cycles
- Finance partners auditing bonus pool allocation
- Department heads recommending bonus amounts for their teams
Inputs
- textEmployee Name / ID
- #Performance Rating (1-5)
- #Tenure (Years)
- $Annual Salary
- textDepartment
- $Total Bonus Pool
Outputs
- Bonus amount per employee
- Bonus as percentage of salary
- Weighted score per employee
- Department allocation totals
- Equity check: bonus-to-salary ratio variance
How Calculations Work
Each employee receives a weighted score based on configurable weights for performance rating, tenure, and salary band. The bonus pool is distributed proportionally to each employee's weighted score as a fraction of the total weighted score. The equity check compares bonus-as-percentage-of-salary across employees and flags outliers beyond a configurable threshold.
Example Use Case
Scenario: A $50,000 bonus pool for 5 employees. Weights: performance 60%, tenure 25%, salary band 15%. Employee A: rating 5, 7 years, $100K. Employee B: rating 3, 2 years, $80K.
Result: Employee A weighted score: 4.45, bonus: $14,200 (14.2% of salary). Employee B: score 2.55, bonus: $8,100 (10.1%). Equity check passes: max variance between bonus-to-salary ratios is 4.1%, within the 10% threshold.
What You Get: 5 Sheets
Technical Details
Frequently Asked Questions
How do the weights work?
Weights determine how much each factor influences the bonus. A 60/25/15 split means performance rating counts for 60% of the score, tenure 25%, and salary band 15%. Weights must sum to 100%.
What does the equity check flag?
It flags employees whose bonus-as-percentage-of-salary deviates from the group average by more than the threshold set in CONFIG (default 10%).
Can I add custom weighting factors?
Yes. Add a column on the INPUT sheet and a corresponding weight in CONFIG. The LOGIC sheet includes the new factor in the weighted score calculation.
What if the bonus pool changes after I calculate?
Update the total bonus pool value on the INPUT sheet. All allocations recalculate automatically since they are proportional.
How do I handle employees who joined mid-year?
Prorate their eligibility by entering their actual tenure in years (e.g., 0.5 for 6 months). The weighted score will reflect their shorter tenure.
Download Bonus Distribution Calculator
Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.