Is a bonus ever repayable?

It is possible to include claw-back provisions in a bonus scheme which require an individual to repay their bonus (gross or net) in certain eventualities. For example, if the bonus is seen as an incentive for future performance and/or a loyalty payment then the company may wish to provide that the bonus is repayable if the employee leaves within six months of the payment. It may also be sensible for bonus schemes to specify that bonus payments made in error are repayable ­ although this could be covered off in other contractual terms.

A bonus scheme may provide that if serious misconduct or a breach of post-termination restrictions is discovered after a bonus has been declared or paid then it is repayable by the individual.