To pay or not to pay: the Christmas bonus dilemma

By KMC Human Resources

18 Dec 2014

Christmas time can throw up a veritable feast of HR issues. In our Christmas series of blogs, we have so far addressed the perils of the staff Christmas party and also how to tackle staff holidays and holiday pay.

By Karen Credie, KMCHR.

In this final article of the series, we turn to Christmas bonuses and look at rewarding staff fairly and lawfully.

For many businesses, the payment of a Christmas bonus to reward staff for their hard work throughout the year is a nice thing to do. But get it wrong, and you could find a generous gesture turning into an employment tribunal claim.

If your business has had a good year and you want to issue a monetary reward to staff, there are a few things you need to consider. Are you going to give everyone in the business a bonus? Will the bonus be the same amount for everyone?

If only some members of staff are to receive a bonus, you need to be careful that you cannot be found at fault for discrimination or an equal pay claim. The grounds on which you award any bonus need to be made clear so all employees have an equal opportunity to be rewarded for their work.

Similarly, if you are paying a different amount to different members/teams of staff, the reasons for this need to be explained.

If the business has had a tough year or cash flow is tight, it could be that the payment of a Christmas bonus is just a step too far. However, employers need to be aware that if a bonus at Christmas time has been made for a few years on the run, this could be seen as having become ‘customary’ and therefore it could be argued that a bonus is a staff entitlement. Where this is the case, employers who decide to reduce the staff bonus or not pay one at all one year could find themselves at risk of claims from employees.

Should you wish to maintain flexibility in the payment of bonuses, you need to ensure that any documentation relating to the payment of a bonus, at Christmas or any other time, highlights they are payable only at the discretion of the company and for a discretionary amount. For help and advice on paying bonuses at Christmas time or throughout the year, or if you are facing a claim from an employee based on the payment / non-payment of a bonus, please get in touch with us.

Latest news

1

Nelson firm sold in deal making it part of largest sofa manufacturing group in UK article placeholder listing image

Nelson firm sold in deal making it part of largest sofa manufacturing group in UK

15 Jul 2026

2

Firm named in North West Fastest 50 for third year running Sustainablelogocominbation Markwith Investmentsfull Colour

Firm named in North West Fastest 50 for third year running

15 Jul 2026

3

Ainsworth Jewellers' Helen Dimmick appointed to British Allied Trades Federation Board Helen With Diamond

Ainsworth Jewellers' Helen Dimmick appointed to British Allied Trades Federation Board

15 Jul 2026

4

Lancashire County Council launches new suppliers charter LSCIMG0237 1

Lancashire County Council launches new suppliers charter

14 Jul 2026

5

High street decline a key issue for locals, according to study Preston City Centre

High street decline a key issue for locals, according to study

14 Jul 2026

Blackburn College (July-Aug 26)
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV129 July/August Magazine Networking Event
Nov/Dec Networking Event
Networking
16 Jul 2026

LBV129 July/August Magazine Networking Event

Brysdales, Britannia Buildings Drumhead Road, Chorley, PR6 7BX

16:00 - 18:00

LBV130 September/October Magazine Networking Event
Jan/Feb Networking Event - Entrance
Networking
17 Sep 2026

LBV130 September/October Magazine Networking Event

The Beehive Blackburn, Shadsworth Business Park, BB1 2QS

08:30 - 10:30

Built Environment Conference 2026
BEC Listing
Networking
24 Sep 2026

Built Environment Conference 2026

08:30 - 13:00

Sub36 Awards 2026
Awards
16 Oct 2026

Sub36 Awards 2026

Park Hall Hotel & Spa , Chorley

18:00 - 00:00

LBV131 November/December Magazine Networking Event
Jan/ Feb Networking Event - Talking
Networking
19 Nov 2026

LBV131 November/December Magazine Networking Event

Lancashire

08:30 - 10:30

Lancashire Business Day 2026
LBD Listing
Networking
27 Nov 2026

Lancashire Business Day 2026

Burnley Football Club, BB10 4BX

12:00 - 17:00

The Business Network Central and East Lancashire
LBV Header (34).png.png
LBV Hub Networking
16 Jul 2026 - 16 Jul 2026

The Business Network Central and East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Achieving more with your money: Your options at retirement
LBV Hub Seminars
16 Jul 2026

Achieving more with your money: Your options at retirement

Accrington Stanley Football Club, Accrington, BB5 5BX

17:55 - 17:55

Preston Freelancer Meet-Up July
LBV Hub Networking
21 Jul 2026

Preston Freelancer Meet-Up July

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 12:00

Legacy & Leadership – Planning for Lift, Death and business continuity
Logo.jpg.jpg
LBV Hub Seminars
21 Jul 2026

Legacy & Leadership – Planning for Lift, Death and business continuity

Lancaster & Morecambe College, Lancaster, LA1 2TZ

09:00 - 10:30

Preston Tech Connection Coworking Day at Society1
PTC coworking day FB 900 Square.png.png
LBV Hub Networking
23 Jul 2026

Preston Tech Connection Coworking Day at Society1

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 12:00

The AI Lab: Marketing Multiplier
LBV Hub Roundtables
31 Jul 2026

The AI Lab: Marketing Multiplier

Door4, Burnley Wharf, Manchester Road, Burnley, BB11 1JG

09:00 - 11:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin