Bonus Announcement Letter Template

A bonus announcement letter formally notifies an employee (or team) that a bonus will be paid. It states the bonus type, basis of calculation, payout date, and any conditions that apply.

A bonus announcement letter is important because it turns a company’s decision to award a bonus into a clear, formal acknowledgment of employee effort. It not only confirms the type of bonus, the period it covers, and when it will be paid, but also reinforces appreciation and motivates employees by recognizing their role in the company’s success.

For the organization, it ensures every employee receives the same message in a consistent format, creating transparency while supporting HR and payroll records.

A standard bonus announcement letter template usually includes:

• Employee’s name, job title, and department
• Bonus type (annual, performance, discretionary, festival, retention)
• Amount or calculation basis (fixed amount or % of salary)
• Eligibility period and conditions (employment status, good standing)
• Payout date and payroll cycle; tax/withholding note
• Policy reference and HR/Payroll contact
• Signature block

No. A bonus announcement letter is issued to inform employees about a specific bonus and its payout details, while a bonus policy is a broader document that explains eligibility rules, calculation methods, and conditions under which bonuses are granted. The letter communicates the actual award, whereas the policy sets the framework.