Bonus Announcement Letter Template

A bonus announcement letter formally notifies an employee or team that they will receive a bonus. It explains the type of bonus, the eligibility period it covers, the calculation method, and when the payout will be processed. The letter also highlights the company’s recognition of employee contributions.

Unlike a policy document, which outlines rules and conditions, the announcement letter communicates a specific award and its details in clear terms.

The bonus announcement letter matters because it transforms a financial decision into a personal acknowledgment of effort. It not only confirms the bonus type and payout date but also reinforces appreciation for the employee’s role in delivering results.

For employees, it creates motivation and clarity. For organizations, it ensures that every eligible employee receives consistent information, which helps avoid confusion and strengthens trust in the process. It also provides a written record that supports payroll accuracy and HR compliance.

A standard bonus announcement letter 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.