US Bonus Payouts Are Shrinking — What Payroll Teams Need to Know
This analysis is based on insights from ADP Research and recent reporting by Forbes on year-end bonus and salary trends.
Recent data shows that year-end bonuses continue to decline in both size and frequency. ADP’s recent payroll analysis of 12 million workers shows bonus recipients declined from 44% in 2021 to under 40% in December 2024, with median payouts falling 4% year-over-year to $1,786. At the same time, Mercer data indicates that 2026 salary increases will remain flat at 3.5% total compensation, with fewer promotions expected. However, exceptions exist: AI-related roles and certain financial services positions are seeing stronger salary growth and higher bonus potential, supported by significant industry investment.
Payroll teams should anticipate processing fewer bonus payments this cycle while maintaining heightened accuracy for high-value payouts in specialized sectors. Fewer bonuses may simplify some calculations but growing pay differentiation across industries adds complexity. Staffing firms, however, face challenges: reduced bonus prevalence affects both placement incentives and candidate expectations, requiring additional compensation discussions.
(Disclaimer: This article is compiled from publicly available news, research, and commentary from third-party publications. einTime is not the original publisher and does not independently verify all claims. Please refer to the original publication for full context and accuracy.)