Provisionsbegreb

Bonus Scheme

A bonus scheme rewards targets over a period. The difference between bonus and commission, and what section 17a of the Danish Salaried Employees Act means when someone leaves.

Example

What is a bonus scheme?

A bonus scheme is an agreement to pay an extra amount when set targets are met, typically for a quarter or a year. Targets can be individual, team-based or company-wide.

Bonus or commission?

CommissionBonus
Triggered byEach dealA target for a period
PayoutTypically monthlyTypically quarterly or yearly
CalculationRate × commission basisFixed amount or % of salary at target
On leaving (Danish salaried employee)Section 9(3)Section 17a

Many plans combine the two, for example ongoing commission plus a milestone bonus at 100% of target.

Section 17a: bonus when someone leaves

Under section 17a of the Danish Salaried Employees Act (funktionærloven), a salaried employee who is partly paid by bonus or similar payments and leaves during a financial year is entitled to a share matching their time employed in that year. This applies regardless of why the employee leaves.

That means a condition that the employee must be employed on a given date to receive earned bonus generally does not hold. The exception is payments that are not pay for work done, such as a genuine retention bonus or sign-on bonus.

Example

A rep has an annual bonus of DKK 60,000 at 100% of the annual target. The financial year is the calendar year, and the rep leaves on 30 September. The target was met.

ItemAmount
Full annual bonusDKK 60,000
Employed 9 of 12 months9/12
Pro rata bonusDKK 45,000

What a bonus agreement should state

  • Targets and how they are measured
  • Period and payout date
  • Amount or percentage at different levels of attainment
  • What happens on absence and departure
  • Whether the scheme is part of pay or can be changed

Bonuses in Prowi

Prowi runs commission and bonus in the same plan, so reps see both their ongoing commission and how close they are to the bonus. See performance.

Prowi is not a law firm. This page describes the general Danish rules; collective agreements and individual contracts can give other rights. Talk to your employers' association or a lawyer when money is at stake.

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In Prowi

Every term on this page is a rule you can write into a commission model in Prowi. The model reads the deal from HubSpot the second it closes, applies the rule, and the rep sees the result on their phone before the day is over.