Home > Financial Maths > Salaries and Wages > Bonuses, Allowances and Holiday Loading

Bonus : A bonus is paid to employees who produce work of a high standard or volume, of for meeting important quotas, goals, or deadlines. In a lot of businesses, employees get annual bonuses (on top of their pay) for meeting certain performance targets.

Allowances : An allowance is paid to employees for work-related expenses like travelling, tools, equipment, official clothing and laundry, etc., or who work under difficult or dangerous conditions like isolated/remote areas like oceans, oil rigs, mining areas, etc.

Holiday loading : In some countries, extra pay in the form of holiday loading is offered. This involves making an extra payment during an employees’ annual leave/vacation. It is paid at a fixed percentage of 4 weeks normal pay.

Example 1 : Tim works as a truck driver in a remote mining town. He receives \$ 13.25 per hour for a 36 hour week, and receives a ‘hardship allowance’ of \$ 1.35 per hour for ever hour worked. What is Tim’s weekly pay?

Tim’s weekly pay  =  normal pay  +  allowances

=  \$13.25 x 36  +  \$1.35 x 36

=  \$477  +  \$48.60

=  \$525.60

Example 2 : Engineers working on an oil rig earn a salary of \$87,250 plus weekly allowance of \$239.65 for working under extreme and dangerous conditions. What is their fortnightly salary?

Fortnightly salary  =  Normal pay  +  Allowances

Normal pay  =  87,250  ÷  26  =  \$3,355.77

Allowances  =  \$239.65 per week  x  2  =  \$479.30

Fortnightly pay  =  3355.77  +  479.30  =  \$3,835.07

Example 3 : A teacher earns a salary of \$73,250. What is her holiday loading if it is 12.5% of 4 weeks’ normal pay?

=  0.125  x  (73,250 ÷ 52 x 4)

=  \$704.33

Example 4 : The owners of Alpha Enterprises give their employees a Christmas bonus of 35% of a fortnight’s pay. What is Tom’s pay during the Christmas week if he earns \$38,650 per annum?

Tom’s weekly pay  =  \$38,650  ÷  52

=  \$743.27

Christmas bonus  =  35% of a fortnight’s pay

=  0.35  x  (38,650 ÷ 26)

=  \$520.29

Tom’s earnings during Christmas week  =  normal pay  +  bonus

=  \$743.27  +  520.29

=  \$1,263.56