Total bonus payments across the UK economy totalled £38.6 billion between May 2012 and April 2013, up 4% year-on-year, according to research by the Office for National Statistics (ONS).
But employers delayed paying £1.7 billion of this total to help employees take advantage of the change to top-rate tax, which fell from 50% to 45% from 6 April 2013.
This resulted in total bonus payments received between April 2012 and March 2013 totalling £36.9 million, according to the ONS’ Average weekly earnings, bonus payments in Great Britain report, publsihed in August.
The research also showed that employees in the finance and insurance sector continue to receive the highest bonuses, with an average bonus of £11,900 per employee.
Joris Wonders, director of the UK reward practice at Towers Watson, said: “When designed and implemented effectively, short-term variable pay can be an effective way for employers to incentivise employees.
“However, when employers pay out bonuses regardless of individual or financial performance, the rewards can be perceived as an entitlement, rather than an incentive, and lose their value as an employee motivator.”