This Precedent sets out various sample contractual and discretionary bonus provisions, which may be inserted into a contract of employment or which may be adapted to form the basis of a separate bonus scheme. Before drafting, consider whether the bonus is to be contractual, discretionary, or a hybrid (meaning partly contractual, e.g., based on a employee's sales, and party 'topped up' by a discretionary element).

1.1 You will OR may, at the sole and absolute discretion of the Employer, be entitled to receive a bonus [each year] calculated by reference to specify method of calculation OR amounting to enter percentage % of your basic annual salary as at the date the bonus is paid OR at a rate to be decided by the Company from time to time. Bonus payments are not pensionable and are normally paid in specify month in each year.

1.2 [The Company reserves the right to end or amend the bonus scheme without notice at any time and to exclude you from participation in the bonus scheme for any reason.]