Gratuity vs. Bonus: Know the Difference
By Shumaila Saeed || Updated on December 26, 2023
Gratuity is a voluntary payment given for services, often as a tip, while a bonus is an additional compensation given by an employer, usually for performance.
Key Differences
Gratuity is a voluntary payment made as a token of appreciation for service, commonly seen in hospitality. A bonus is an additional compensation provided by an employer, often as a reward for good performance or company profitability.
Shumaila Saeed
Dec 26, 2023
Gratuity is not typically expected as part of a contractual agreement and varies based on customer discretion. A bonus, however, may be expected if outlined in employment terms or as part of a company's regular practice.
Shumaila Saeed
Dec 26, 2023
The amount of gratuity is usually at the discretion of the service recipient and can be a percentage of the total bill. Bonuses are determined by the employer, potentially based on performance metrics, company success, or set percentages of salaries.
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Dec 26, 2023
Gratuity is more common in service industries and varies widely by culture and country. Bonuses are common in various employment sectors and can be influenced by industry standards and economic conditions.
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Dec 26, 2023
Gratuity may or may not be taxable depending on local laws and the amount. Bonuses are typically considered part of income and subject to taxation, with different rules based on the form and frequency.
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Dec 26, 2023
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Comparison Chart
Calculation
Based on service value, discretionary
Based on performance or company policy
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Dec 26, 2023
Variation
Common in service industry, varies by culture
Across various sectors, influenced by industry standards
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Dec 26, 2023
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Gratuity and Bonus Definitions
Gratuity
A voluntary tip for service.
He left a generous gratuity for the exceptional service.
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Dec 26, 2023
Bonus
An extra payment for employees by employers.
She received a bonus for her outstanding performance.
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Dec 26, 2023
Gratuity
A discretionary reward for service beyond the bill.
At the end of the meal, they added a 20% gratuity.
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Dec 26, 2023
Bonus
A company-provided incentive for employees.
The company gave a holiday bonus to all staff.
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Dec 26, 2023
Gratuity
An optional payment for service satisfaction.
Gratuity is often given to show appreciation for good service.
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Dec 26, 2023
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Gratuity
Extra payment as a gesture of thanks.
The gratuity she gave the waiter reflected her satisfaction.
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Dec 26, 2023
Bonus
A sum of money or an equivalent given to an employee in addition to the employee's usual compensation.
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Oct 19, 2023
Gratuity
A monetary thank you to service providers.
The gratuity on the cruise was automatically added to their bill.
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Dec 26, 2023
Bonus
A sum of money in addition to salary that is given to a professional athlete for signing up with a team.
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Oct 19, 2023
Gratuity
A favor or gift, usually in the form of money, given in return for service.
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Oct 19, 2023
Gratuity
Euphemistic form of fee, in contexts where such additional payments have been made obligatory.
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Oct 19, 2023
Bonus
A premium, as of stock, that is given by a corporation to another party, such as a purchaser of its securities.
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Oct 19, 2023
Bonus
A sum of money that is paid by a corporation in excess of interest or royalties charged for the granting of a privilege or a loan to that corporation.
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Oct 19, 2023
Gratuity
Something given freely or without recompense; a free gift; a present.
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Oct 19, 2023
Bonus
(Basketball) An additional free throw awarded to a player who has been fouled when the opposing team has committed more than a specified number of fouls during a period of play.
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Oct 19, 2023
Gratuity
Something voluntarily given in return for a favor or service, as a recompense or acknowledgment.
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Oct 19, 2023
Gratuity
A relatively small amount of money given for services rendered (as by a waiter)
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Oct 19, 2023
Bonus
An extra sum given as a premium, e.g. to an employee or to a shareholder.
The employee of the week receives a bonus for his excellent work.
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Oct 19, 2023
Gratuity
An award (as for meritorious service) given without claim or obligation
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Oct 19, 2023
Bonus
(video games) An addition to the player's score based on performance, e.g. for time remaining.
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Oct 19, 2023
Bonus
(basketball) One or more free throws awarded to a team when the opposing team has accumulated enough fouls.
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Oct 19, 2023
Bonus
A premium given for a loan, or for a charter or other privilege granted to a company; as the bank paid a bonus for its charter.
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Oct 19, 2023
Bonus
An extra dividend to the shareholders of a joint stock company, out of accumulated profits.
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Oct 19, 2023
Bonus
An additional payment (or other remuneration) to employees as a means of increasing output
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Oct 19, 2023
Bonus
Additional compensation over regular salary.
The year-end bonus was a welcome addition to his income.
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Dec 26, 2023
Bonus
A reward for exceptional work performance.
He earned a bonus after completing the project successfully.
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Dec 26, 2023
Bonus
An employer's financial reward for good service.
Their bonuses were tied to the company's profitability.
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Dec 26, 2023
Repeatedly Asked Queries
Can gratuity be a fixed amount?
It's usually a percentage but can be fixed.
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Dec 26, 2023
Is gratuity included in the bill?
Sometimes it's included, especially in restaurants.
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Dec 26, 2023
Are bonuses always cash?
No, they can also be stock options or other forms.
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Dec 26, 2023
Do self-employed individuals receive gratuities?
Yes, particularly in service-oriented professions.
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Dec 26, 2023
Can bonuses be guaranteed?
They're often discretionary, depending on company policy.
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Dec 26, 2023
Is gratuity common in all countries?
Its practice varies greatly by culture and country.
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Dec 26, 2023
Is a service charge the same as gratuity?
No, a service charge is a mandatory fee, while gratuity is optional.
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Dec 26, 2023
Are bonuses part of employment contracts?
Sometimes, they can be outlined in contracts.
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Dec 26, 2023
Does gratuity depend on service quality?
Typically, yes, it reflects the level of satisfaction.
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Dec 26, 2023
Can bonuses be tied to company profits?
Yes, profit-sharing bonuses are common in some companies.
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Dec 26, 2023
Should gratuity be given in cash?
It can be, but non-cash gratuities are also common.
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Dec 26, 2023
How do cultural norms affect gratuity?
Cultural norms greatly influence the expectation and amount of gratuity.
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Dec 26, 2023
Can bonuses be performance-based?
Often, they are linked to performance or company success.
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Dec 26, 2023
Do bonuses affect job satisfaction?
Yes, they can significantly impact employee morale.
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Dec 26, 2023
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About Author
Written by
Shumaila SaeedShumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.
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