What is a spot bonus?

Written by: Holly Bengfort
Originally published on April 5, 2023. Last updated May 8, 2023.

When you have exceptional employees, you want to reward them for their hard work. A promotion or bump in salary isn't your only option to show appreciation. You can recognize an employee's extra effort or specific accomplishments with a spot bonus. Unlike annual bonuses, spot bonuses are given "on the spot" to reward an employee for a particular action or behavior.

In this article, we'll go over some examples of spot bonuses, their benefits, and how you can offer an employee bonus program of your own.

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Why should you reward an employee with a spot bonus?

A spot bonus, spot reward, spot award, or spot bonus incentive is used to acknowledge employee performance. It's given to them instantly rather than at a more convenient time for the employer. This type of prize can be awarded to an employee whose positive behavior reflects company values or for their outstanding performance on a certain task or assignment.

Here are some common reasons why employers choose to award spot bonuses:

  • As a reward for meeting a specific goal
  • To celebrate an employee's anniversary with the company
  • As a reward for a job well done on a tough project
  • To increase productivity in the workplace
  • To promote teamwork or recognize team achievements
  • To recognize employees who "live the brand"

One company that's embraced spot bonuses is PwC1. Following the COVID-19 pandemic, PwC gave employees a spot bonus equal to one week’s pay. This was done as a "thank you" to acknowledge their hard work during the difficult transition of working from home.

Examples of spot bonuses

According to Indeed2, spot bonus awards can range from $50 to $5,000. Employers typically spend approximately 1% of payroll on spot bonuses and award them to a quarter of eligible employees, though you can offer spot bonuses however you’d like.

Spot rewards are often monetary rewards, but you have other options to choose from.

Additional examples of spot bonuses include:

  • Gift cards or certificates
  • Gifts or presents
  • Additional paid time off (PTO)
  • Trips or vacations

The benefits of spot bonuses

When you reward employees for their exceptional behavior, it makes them feel appreciated. It reminds them that hard work pays off. Since spot bonuses are instant rewards, they quickly improve employee morale and boost team performance. On top of that, happy employees tend to stay at their jobs and willingly encourage others to join their talented team.

Giving your employees special recognition for their extraordinary efforts is also good for business. Spending money in the short term will save you money in the long run since spot bonuses are a low-cost initiative. Since these are given out at the employer's discretion, you can choose the appropriately-sized reward amount. Plus, since it's a spontaneous incentive, employees don't expect it to be as much as an annual bonus.

Other types of bonuses to consider

You can also use other types of employee bonuses to recruit and retain top-tier talent.

Holiday bonuses can be given out equally to your entire staff during the "season of giving" to show your gratitude. This may sound similar to a year-end bonus, but there's a key difference. Year-end bonuses take each individual employee's years of service, base salary, and performance into account.

You can also offer a referral bonus that rewards employees who refer job candidates that the company hires. Along with referral bonuses, you can use sign-on bonuses to welcome those new workers.

Employers also use retention bonuses to recognize employees who stick around for a set period of time. Additionally, a retention bonus is meant to encourage employees to stay with their company long-term.

Implementing a spot bonus program

More and more businesses are using spot bonuses to increase employee engagement, employee loyalty, and employee retention. A 2022 PayScale report3 found that 79% of organizations offer some form of variable pay through employee bonus programs.

When creating a spot bonus program of your own, here are some general guidelines to follow from Indeed4:

  • Provide rewards that are well deserved. You don't want employees to expect a reward for every single thing they do. Try to use spot bonuses sparingly for special occasions where employees go above and beyond.
  • The element of surprise. Keep employees on their toes by offering spot bonuses at irregular times.
  • Provide the reward immediately. Awarding the spot bonus right away further reinforces positive behavior. It also continues to build trust with your employees by showing that you're reliable.
  • Mix it up. Use your creativity and find different situations where a spot bonus could be used as a useful tool.
  • Be fair. Avoid favoritism and remain objective when rewarding employees.
  • Choose appropriate reward amounts. If the value of a spot bonus seems insignificant, it could hurt employee morale rather than improve it.

How PeopleKeep can administer your spot bonus

With WorkPerks from PeopleKeep, you can offer spot bonuses as a custom, one-time stipend. Our benefits administration platform makes it easier for you to focus on running your business since our team handles the administrative work for you. Our model ensures that the money you set aside is used as intended by your employees. Also, you’ll save money by being able to set your own budget and keeping whatever stipend amount your employees don’t use.

Plus, you can offer a variety of stipends through WorkPerks. Employers can design their benefit to reflect the wants and needs of their employees. You can offer a stipend for gym memberships, wellness apps, mental health counseling, internet access, home office set-up, and more.

Additional stipends go a long way in making your employees feel appreciated and valued at your organization. They can also help you attract new talent. A 2022 report from PeopleKeep found that 82% of employees say that the benefits package an employer offers is an important factor in whether or not applicants accept a job.


Spot bonuses are given to employees for their exceptional behavior and special achievements that deserve immediate recognition. Typically, these spur-of-the-moment gifts are $50 or more. While these types of bonuses are often a monetary incentive, you could also offer a gift card or additional PTO as a spot reward.

With WorkPerks, offering a spot bonus to your employees is easy with the help of our dedicated team. When we administer benefits for you, we take care of compliance and make sure your money is being spent as intended. You can also easily add other desirable stipends to your benefits package through our benefits administration platform.

Offering bonuses to employees "on the spot" can lead to greater engagement and productivity. As far as bonuses go, spot rewards are a cost-effective option for employers who want to recruit and retain top talent.

At PeopleKeep, we're dedicated to finding the right benefits for your organization and its employees. Schedule a call with a personalized benefits advisor now!

Originally published on April 5, 2023. Last updated May 8, 2023.


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