Divide a bonus pool fairly across your team. Fund the pool as a fixed amount or a share of profit, then allocate it by target bonus and performance multiplier, by salary, or equally, with optional caps and a full payout table.
Last updated:
Bonus pool
Pool is
$
$
%
Untick to pay calculated amounts unscaled and see the pool surplus or shortfall (target method).
% of salary
Optional. Amounts above the cap are redistributed to others.
One per line. Multiplier 1.0 = meets expectations (e.g. 0 to 1.5). Target % and multiplier default to 0 and 1 if left out.
Enter your values to see the result.
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How to use the Bonus Pool Allocation Calculator
Set the pool: a fixed amount, or profit and the share of profit for bonuses.
Choose the allocation method; target × multiplier is the most common for performance bonuses.
List employees: name, salary, target bonus % and performance multiplier, one per line.
Optionally add a cap or untick scaling to compare targets with the pool.
Press Calculate bonus allocation to see each payout, the totals and the chart.
Payout = pool × weighted share ÷ total weighted shares
Pool funding = pool ÷ total target bonuses × 100
Example: two employees share a $10,000 pool. Ana earns $80,000 with a 10% target ($8,000) and a 1.2 multiplier, a weight of 9,600. Ben earns $60,000 with a 10% target ($6,000) and a 1.0 multiplier, a weight of 6,000. The total weight is 15,600, so Ana receives $10,000 × 9,600 ÷ 15,600 = $6,154 and Ben receives $3,846.
Comparing allocation methods
Method
Weight per person
Best for
Target × multiplier
Salary × target % × rating multiplier
Performance plans with set targets by level
Salary × multiplier
Salary × rating multiplier
Plans without targets that still reward performance
Pro rata salary
Salary
Profit sharing where everyone gets the same % of pay
Equal split
1
Team or spot bonuses, holiday bonuses
Tips for a fair bonus process
Agree the multiplier scale before reviews so ratings are not adjusted to fit the money.
Prorate for partial years by reducing the salary entered for people who joined mid-year.
Explain the method to employees: a clear formula builds more trust than the amount itself.
Frequently asked questions
How do you allocate a bonus pool?
A common method: each person's weighted share = salary × target bonus % × performance multiplier. Add up all weighted shares, then pay each person pool × their share ÷ the total. This keeps the ratios set by targets and ratings while spending exactly the pool.
What is a performance multiplier?
A factor tied to a performance rating, for example 0 for not meeting expectations, 1.0 for meeting them and 1.5 for exceptional. It increases or reduces the target bonus before the pool is shared out.
What happens if the pool is smaller than total target bonuses?
Scaled allocation reduces every payout by the same factor, so someone with a 1.2 multiplier still receives 20% more than their target-based share relative to others. The pool funding percentage shows how far the pool covers the targets (for example 80%).
How does the cap work?
If a payout would exceed the cap (as a percentage of salary), it is set at the cap and the excess is shared among the other employees in proportion to their weights. If everyone hits the cap, the rest of the pool stays unallocated.
How is a profit-based bonus pool calculated?
Pool = profit × the percentage set aside for bonuses. For example, 8% of $600,000 profit funds a $48,000 pool. Some plans only fund the pool after a minimum profit threshold is reached; in that case enter the profit above the threshold.
Are bonuses taxed differently?
In the US, bonuses are supplemental wages. Employers often withhold federal income tax at a flat 22%, plus Social Security, Medicare and state tax. Use the Bonus Tax Calculator to estimate each person's take-home.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.