Workers received larger year-end bonuses in December following a year of job gains and wage increases, according to a report from Gusto.
The average bonus amount in December was $2,503, up from $2,447 in 2023, indicating a 2% increase.
Gusto’s senior economist, Nich Tremper, highlighted the significance of these bonuses, stating that they represent about one paycheck for employees.
More from Personal Finance:
Here’s the inflation breakdown for December
Health-care jobs are in demand in 2025
How much — if any — bitcoin should you own?
Tremper emphasized that small businesses took advantage of the improved economy in 2024 by offering higher wages and bonuses to their employees.
Industries with Varied Bonus Amounts
Bonuses varied by industry, with white-collar sectors such as communications, technology, and professional services seeing significant increases in year-end bonuses.
Adam Beasley, owner of an accounting firm, remarked that bonuses were based on profitability, with his staff receiving larger bonuses due to a successful year.
In contrast, service industry workers experienced smaller bonuses in sectors like transportation and warehousing where demand decreased.
Despite industry variances, the job market remained strong in 2024, with consistent employment growth and a decrease in the unemployment rate to 4.1% in December.
Bonuses were used by some employers to retain top talent in a competitive labor market, with fewer companies offering bonuses to all employees.
Balancing Money and Work-Life
Companies need to stay competitive by offering bonuses as an incentive for employees to stay, according to Michelle Reisdorf, district president at Robert Half.
Managers reported higher bonus offerings in 2024 compared to the previous year, with a focus on work-life balance, flexible hours, and mental health support.
Flexible work schedules, paid time off, health insurance options, and retirement plans were cited as valuable perks by employees seeking a better work-life balance.