Prorated Bonus Calculator

A prorated bonus is calculated by dividing the full bonus amount by the total days in the bonus period, then multiplying by the days actually worked or eligible. Formula: Prorated Bonus = Full Bonus × (Days Worked ÷ Total Days in Period). For example, if your annual bonus is $12,000 and you started July 1st, you worked 184 days out of 365: $12,000 × (184 ÷ 365) = $6,049.32. Some companies use calendar days, others use work days (excluding weekends/holidays). Always check your company's specific policy.

The choice between calendar days and work days depends on company policy. Calendar days (365/366 per year) is simpler and more common, treating all days equally including weekends and holidays. Work days (typically 260-262 per year) only counts Monday-Friday and may exclude company holidays. Work day proration results in a slightly higher per-day rate. Example: $10,000 annual bonus ÷ 365 calendar days = $27.40/day. $10,000 ÷ 260 work days = $38.46/day. Neither method is "correct" - follow your company's documented policy to ensure consistency.

Bonus eligibility for new hires varies by company and bonus type: (1) Immediate eligibility - Rare, usually only for senior hires with negotiated terms. (2) After probation (90 days) - Common; bonus prorated from eligibility date. (3) After 6 months - Middle ground approach. (4) Full year required - Must complete entire bonus period, no proration. (5) Cliff vesting - Must be employed on payout date to receive anything. Always review your offer letter and bonus plan documents. Some companies also have "minimum service" requirements (e.g., must work 60+ days to receive any prorated amount).

Bonus treatment upon termination depends heavily on your employment agreement and company policy: (1) Voluntary resignation - Many companies forfeit unvested bonuses; some prorate through last day worked. (2) Involuntary termination (layoff) - More likely to receive prorated amount; check separation agreement. (3) Termination for cause - Usually forfeits all unvested bonuses. (4) Timing matters - Resigning right before bonus payout may forfeit the entire amount. (5) "Employed on payout date" clauses - Common requirement; leaving before payout = no bonus even if earned. Review your bonus plan language carefully, especially the "forfeiture" and "eligibility" sections.

Unpaid leave typically reduces bonus eligibility: (1) Short leaves (< 2 weeks) - Often no impact or ignored. (2) Extended unpaid leave - Usually excluded from eligible days. (3) FMLA leave - Treatment varies; some companies count it, others don't. (4) Disability leave - May be treated differently than voluntary leave. (5) Sabbatical - Usually excluded from bonus calculation. Example: Annual bonus $10,000, took 30 days unpaid leave. Days worked: 365 - 30 = 335. Prorated: $10,000 × (335/365) = $9,178. Note: Paid leaves (vacation, sick time) generally don't affect bonus proration. Check your HR policies for specific treatment of different leave types.

The formula is the same, but the period differs: Annual bonus: Divided across 365 days, prorated by days worked in the full year. Quarterly bonus: Divided across ~91 days (quarter), prorated by days worked in that quarter. Monthly bonus: Divided across ~30 days, prorated by days in that month. Example: Same $12,000 target, started November 1: Annual proration (Nov 1 - Dec 31): 61/365 = $2,005. Quarterly Q4 proration (Nov 1 - Dec 31): 61/92 = $7,956. For employees joining mid-year, quarterly or monthly bonuses often result in higher payouts than annual proration because missed quarters may not affect current quarter eligibility.

Signing bonuses typically have clawback provisions rather than proration: (1) Standard clawback - Must repay if you leave within 1-2 years, often prorated by month. (2) Full clawback - Some require 100% repayment if leaving before a set date. (3) Gross-up considerations - May need to repay gross amount despite receiving net after taxes. Example: $20,000 signing bonus with 24-month clawback. Leave after 18 months: Repay $20,000 × (6/24) = $5,000. Tax complication: You received ~$14,000 net but may owe $5,000 gross. Always negotiate clawback terms during offer stage. Some companies have declining schedules (100% in year 1, 50% in year 2, 0% after).

Strategies for negotiating fair bonus treatment: (1) Request a guaranteed minimum - "First year bonus guaranteed at minimum 75% of target." (2) Ask for signing bonus offset - Request signing bonus equal to prorated amount you'd miss. (3) Negotiate full first-year bonus - Some companies will pay full annual bonus regardless of start date. (4) Clarify proration method - Get in writing whether it's calendar days, work days, or months. (5) Review cliff dates - Ensure bonus doesn't require being employed exactly 12 months. (6) Document everything - Get bonus terms in your offer letter, not just verbal promises. (7) Ask about early bonus eligibility - Some companies waive waiting periods for senior hires. Start this conversation during salary negotiation when you have the most leverage.