Company Incentive Programs
3 Most Common Applications for Incentive Programs:
- Sales and Loyalty Programs: Businesses typically budget 2% to 3.5% of sales to be awarded to salespeople for exceeding sales thresholds. Most programs will use 90% to 95% of award budgets.
- Safety, Attendance, and Turnover Reduction: Common per person budgets are between $200 and $400 per year. Most good programs will use 70% to 80% of their budgets.
- Years of Service Awards: Businesses will typically award people a years of service gift starting at 5 years and each 5 year increment therafter. Typically $10 to $50 per year of service is used to budget for awards.
NOTE: The IRS allows for SAFETY and YEARS OF SERVICE Awards to be NOT TAXABLE as income to the recipient, as long as the reward is tangible merchandise and worth $400 or less. Refer to US Tax Code 274, J