Bonus Agreement Template (Denmark): Free Word (2026)

Bonus agreement template: the short answer

A bonus agreement is a written annex to the employment contract that sets out bonus type, earning period, targets, weighting, payout scale, calculation and payment, and what happens on leaving, during absence, during holiday and when the scheme changes. Download our free Word template, fill in the fields in brackets and adapt it to your collective agreement and contract. The template is written for companies employing salespeople and sales managers in Denmark under Danish law.

Download the bonus agreement template (Word, free)

The template is a starting point, not legal advice. Adapt it to your collective agreement and employment contract, and have it reviewed if you are in doubt.

The template is written for salaried employees covered by the Danish Salaried Employees Act (funktionærloven), for example sales reps and sales managers. It has 11 sections with fields in lavender brackets, options and short guidance notes that you delete before the agreement is signed. Below we go through the sections and a worked example. It is part of our free commission and sales compensation templates.

What is a bonus agreement?

A bonus agreement is the legal part of a bonus scheme: the document that makes the scheme part of the employment. The design of the scheme itself, which targets are rewarded and how large the bonus should be, is covered in our guide to bonus schemes.

A bonus is triggered when a target is met, while commission is a percentage of each sale (see commission vs bonus). If the employee also earns commission, that belongs in a separate commission agreement, because the rules for holiday, absence and leaving are different.

What should a bonus agreement include?

Danish law has no set form for a bonus agreement. But the components of pay, including bonus, must be stated in writing (section 3 of the Danish Employment Contracts Act, ansættelsesbevisloven), and several rules in the Salaried Employees Act and the Holiday Act assume you have a method you can point to. The table shows the template's sections:

Section	What it covers	Why it matters
1. Parties and effective date	Who, which role, from when	Makes the agreement part of the employment
2. Bonus type and earning period	Annual, quarterly, MBO or team bonus and target bonus as an amount	The employee can work out their expected pay
3. Targets and target setting	Who sets targets, when and based on what data	New annual targets generally do not require notice
4. Weighting and payout scale	Weight per target, threshold, target and maximum	A worked example makes everyone read it the same way
5. Calculation and payment	Statement, timing, advance bonus and objections	Connects the agreement to payroll
6. Bonus on leaving	Proportional bonus under section 17 a of the Salaried Employees Act	Cannot be waived to the employee's detriment
7. Bonus during absence	Sickness, pregnancy, parental leave and other leave	Bonus generally follows the right to pay
8. Holiday and holiday pay	How bonus enters the holiday pay calculation	Avoids inventing the method afterwards
9. Changes to the scheme	Notice and time limits	Material changes require individual notice
10. Disagreement	Who, how and where	A fixed route before it becomes a case
11. Signatures	Both parties	Documents that the agreement was accepted

2. Bonus type and earning period

The template covers four types, which can be combined:

Bonus type	Good for	Watch out for
Annual bonus	Targets that can only be measured after the year, for example gross margin or annual profit	A long gap between effort and reward
Quarterly bonus	Fast feedback and ongoing motivation	More statements and targets to set more often
MBO bonus	Personal objectives that cannot be measured in money, for example a project or customer satisfaction	Must be assessable objectively, or it becomes a judgement call
Team bonus	Cooperation and shared targets	Can dilute individual responsibility; agree the split in advance

State the target bonus as an amount, for example DKK 72,000 a year, and preferably also as a percentage of fixed salary. It is the clearest way to show what the employee can expect at 100% attainment. See also sales manager salary and bonus.

3. Targets and target setting

Agree who sets the targets, when they are notified and what data is used. The Danish Chamber of Commerce (Dansk Erhverv) writes that where new bonus targets are set every year, the new targets generally do not need notice unless they differ materially from earlier ones. That assumes the agreement says targets are set on an ongoing basis. Also state what happens if the employee's territory changes during the period.

4. Weighting and payout scale

The template has a table for up to three targets with weight, threshold, target and maximum, and a payout scale: below the threshold nothing is paid, at the threshold for example 50%, at target 100% and at maximum for example 150% as a cap. Between the points, the payout is calculated linearly. If you have a condition for the whole bonus, for example that the company must make a profit, it must be in the agreement from the start.

5. Calculation and payment

Agree when the bonus is calculated, which system is the source and when it is paid with salary. Give the employee a written statement with result, attainment and payout percentage for each target. If you pay an advance bonus, state what happens if it is larger than the final bonus.

6. Bonus on leaving: section 17 a of the Salaried Employees Act

This is the agreement's most important legal section. Under section 17 a(1) of the Salaried Employees Act, a salaried employee who by agreement or custom is partly paid by profit share, gratuity or similar benefits is entitled to a proportional share when leaving during a current financial year. The share reflects the period of employment in the year and is calculated on the benefit the employee would have received if employed until the end of the year or the payment date.

Three things matter:

The reason does not matter: the right applies whether the employee resigns or is dismissed. The Confederation of Danish Industry (Dansk Industri) writes that a requirement to be employed on a specific date to earn a bonus is generally invalid.
It cannot be waived: the Act's rules cannot be waived by agreement to the employee's detriment (section 21). A clause saying the bonus lapses on leaving therefore generally does not hold for a bonus that is part of pay.
Exceptions are narrow: according to Dansk Industri, a pure retention or sign-on bonus may in special cases fall outside if it is not remuneration for work. That depends on a specific assessment of the scheme, and the Danish Supreme Court awarded a departing salaried employee a proportional share of a retention bonus under section 17 a (case 134/2016, 30 June 2017). Share options and subscription rights are excluded (section 17 a(2)).

The template calculates the proportional share of the bonus calculated for the whole earning period and pays it at the normal time. The period of employment runs until the last day of employment, also if the employee is released from duty during the notice period. See also commission after resignation in the glossary.

7. Bonus during absence

A bonus is considered part of pay. Dansk Erhverv therefore writes that salaried employees earn bonus during sickness, and that bonus during pregnancy and leave is earned for the periods where the employee is entitled to pay from the employer. With half pay under section 7 of the Salaried Employees Act, half bonus is earned, and with full pay under a collective agreement or the contract, full bonus. The template lets you choose whether targets are reduced proportionally or the absence is settled as target bonus. The most important thing is that the method is in the agreement and used the same way for everyone.

8. Holiday and holiday pay

The Danish Holiday Act distinguishes between holiday with pay (fixed salary plus a 1% holiday allowance) and holiday pay (feriegodtgørelse, 12.5%). Holiday pay is generally calculated on all taxable pay that is remuneration for work (section 19(1) of the Holiday Act), and holiday allowance is calculated under the same rules. During the holiday itself there is generally no right to compensation for bonus, because a bonus on annual targets is rarely directly affected by the holiday, according to Dansk Erhverv. If the bonus depends on the employee being at work, it may be different, as with holiday pay on commission.

9. Changes to the bonus scheme

New annual targets are not a change as long as they do not differ materially from earlier ones. A material change that leaves the employee worse off, for example a lower target bonus, a new scale, new conditions or abolishing the scheme, must be notified individually with the employee's notice period. Changes to pay information must also be notified in writing no later than the day they take effect (section 5 of the Employment Contracts Act). If the scheme is time-limited, write the end date; if it has been extended several times, the employee may have gained a legitimate expectation that it continues.

10. Disagreement and 11. signatures

Agree that disagreement is first discussed with the manager or HR, and whether disputes are settled under the collective agreement or by the courts. Keep targets, statements and agreement versions: the limitation period is generally 3 years (section 3(1) of the Danish Limitation Act, forældelsesloven).

Worked example: how the bonus is calculated

Example: A rep has a target bonus of DKK 72,000 a year, equal to 15% of a fixed annual salary of DKK 480,000. The scale gives a 50% payout at the threshold (80% attainment), 100% at target and 150% at maximum (120% attainment). These are the numbers in the template.

Target	Weight	Target value	Result	Attainment	Payout	Bonus
New revenue	50%	DKK 4,000,000	DKK 4,400,000	110%	125%	DKK 45,000
New customers	30%	20	18	90%	75%	DKK 16,200
Personal objective (MBO)	20%	Met	Met	100%	100%	DKK 14,400
Total	100%				105%	DKK 75,600

How the numbers are calculated: 110% is halfway between target and maximum, so the payout is 100% + 0.5 × 50% = 125%, and the bonus for the target is 72,000 × 50% × 125% = DKK 45,000. 90% is halfway between threshold and target, so the payout is 50% + 0.5 × 50% = 75%, and the bonus is 72,000 × 30% × 75% = DKK 16,200. The MBO objective gives 72,000 × 20% × 100% = DKK 14,400. DKK 75,600 in total, a weighted payout of 105%.

On leaving: if the rep leaves on 30 June, they have been employed for 6 of the year's 12 months. The proportional bonus is 75,600 × 6/12 = DKK 37,800, paid when the year's bonus is calculated.

How to use the template

Choose the bonus type: delete the types and options you do not use.
Fill in the fields: every lavender field in brackets must be completed.
Set targets and scale: fill in the table in section 4, and work through an example with the employee's own numbers.
Check the collective agreement and have it reviewed: a collective agreement can give better terms than the law. If in doubt, ask a lawyer or your employers' organisation to read the agreement.
Delete the guidance: the text in the lavender boxes is for you, not for the agreement.
Sign and keep it: keep every version and target letter so you can always show which rules applied to a payout.

Common mistakes in bonus agreements

The bonus lapses if the employee is not employed on the payment date, even though the bonus is part of pay.
Targets are not written down, or are only notified halfway through the period.
The scale is described without a worked example, or the MBO objectives cannot be measured.
No method for sickness, leave and holiday, so the calculation has to be invented when the situation arises.
A reservation that the scheme can be changed at any time, which in practice does not replace notice.

Prowi and bonus agreements

A bonus agreement only works if the employee can follow how close they are to target and trusts the statement. Prowi calculates commission and bonus continuously from CRM data according to the rules in your plan, reps see their earnings in a mobile app, and once admins approve the statements, the approved amounts go on to payroll, straight into Zenegy or as a payroll file for systems such as Danløn and Visma Dataløn. Book a demo to see your own bonus scheme set up.

FAQ

Does a bonus agreement have to be in writing in Denmark?

Yes, in practice. The components of pay, including bonus, must be stated in writing in the employment contract or an annex (section 3 of the Employment Contracts Act), and changes must be notified in writing no later than the day they take effect. A written agreement with targets, scale and a worked example is also the best protection against disputes.

Is an employee in Denmark entitled to a bonus on leaving?

A salaried employee who is partly paid by bonus is generally entitled to a proportional share when leaving during the year, whoever gave notice (section 17 a of the Salaried Employees Act). The right cannot be waived to the employee's detriment. According to Dansk Industri, a pure retention bonus may in special cases be excluded, but in 2017 the Danish Supreme Court awarded a departing salaried employee a proportional retention bonus (case 134/2016).

Can the employer change a bonus scheme?

Yes, but a material change that leaves the employee worse off must be notified individually with the employee's notice period. New annual targets generally do not require notice if the agreement provides for annual target setting and the targets do not differ materially from earlier ones.

Is bonus earned during parental leave?

Bonus is generally earned in the same proportion as the employee is entitled to pay from the employer. With half pay under section 7 of the Salaried Employees Act, half bonus is earned, and with full pay under a collective agreement or the contract, full bonus.

Is holiday pay due on bonus?

Bonus is taxable pay for work and is generally included in the basis for holiday pay and holiday allowance (section 19 of the Holiday Act). There is rarely a right to compensation during the holiday itself, because a bonus on annual targets is usually not affected by the holiday.

Is the bonus agreement template free?

Yes. You can download the Word file and use it freely. It is a starting point, not legal advice, so adapt it to your collective agreement and contract.

Sources

This article is general information, not legal advice. Check your collective agreement and employment contract.