What is a Deferred Bonus Pool?

What it does

A Deferred Bonus Pool lets you hold back a percentage of earned bonuses instead of paying everything out right away. You pick when the held amount gets released, and it pays out like a normal bonus when that time comes.

Why you'd use it

• You want to pay bonuses at the end of a quarter or year instead of all at once
• You need tighter control over cash before paying out full incentives
• You want crews to stay focused on long-term performance, not just one job

How it works

1. A bonus is earned on a job
2. Part of it pays out immediately
3. The rest is held
4. On your set release date, the held amount is released
5. It pays out through your normal bonus process

Example:

• Budget: $100 / Actual: $80 / Bonus earned: $20
• With a 50% holdback: $10 pays now, $10 is held
• The held $10 releases at the end of the quarter or year and pays out like normal

When it makes sense

• You run bonuses on a quarterly or annual cycle
• Jobs run longer than a week or two
• You want to delay part of payouts on purpose

What you need to know before setting it up

• Holdback percentage must be between 0% and 100%
• You can only have one "all incentives" pool active at a time
• Pools can't overlap on the same incentives
• You'll choose either quarterly or annual timing when you set it up
• Negative bonuses (deductions) are only included if you turn that setting on

What happens to held bonuses

Held bonuses are tracked separately and assigned a release date. When they release, they move into your normal bonus statements and pay out through your standard process. Nothing falls through the cracks.

Common mistakes

• Setting the holdback too high without thinking through the cash flow impact
• Applying it to all incentives when you only meant to apply it to some
• Setting up overlapping pools on the same incentives

FAQ

Can I choose which bonuses this applies to? Yes. Apply it to all incentives or pick specific ones.

Can I change it after it's set up? Yes, but changes will affect how future bonuses are handled, not past ones.

Are negative bonuses included? Only if you turn on the deductions setting.