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Salary Bonuses in 2018 - How Does Your Bonus Stack Up?

Profile for Rob Scott, Managing Director of Aaron Wallis Sales Recruitment


In commission based roles like sales or recruitment, bonus pay forms a key part of overall income.  However, it’s not just these roles which benefit from incentive pay as the majority of private sector jobs also include some sort of performance-based bonus.

We’ve collated research from a series of datasets from the Office For National Statistics to discover the state of bonus pay in 2018 and how much incentive income the average UK earner could expect to be paid.


So how much does the average UK earner take home each year as incentive pay?


The Average UK Bonus 2018: £2,242
ONS: Earnings and hours worked in the UK: 2018¹

In 2018, the average UK earner, working full time (defined as working more than 30 paid hours per week), received a bonus of just over £2k. This figure includes earners that did not receive a bonus.

To put this into proportion, the average gross income (everything included) of a full-time UK worker in 2018 is £36,611.


What counts as incentive pay?
“Incentive pay is the amount paid to an employee as a result of meeting a performance or productivity objective, including profit sharing, bonus, piecework and commission payments” (Office For National Statistics)

What’s included in the data source?
The data from the ONS uses 1% of earners on PAYE tax taken from HM Revenues and Customs; in absolute terms, this works out as a sample size of around 300,000 UK earners.

 

Which jobs pay the highest bonuses?

Bonuses can be a controversial topic, particularly in the last 10 years following the banking crisis. Below is a breakdown of the average bonus by occupation:
 

Occupation Average Bonus Jobs in the UK
Corporate managers and directors £7,878 1,988,000
Business, media and public service professionals £2,271 1,220,000
Science, research, engineering and technology professionals £2,197 1,119,000
Skilled metal, electrical and electronic trades £946 861,000
Customer service occupations £866 464,000
Skilled construction and building trades £689 280,000
Sales occupations £616 1,313,000
Administrative occupations £582 2,040,000
Process, plant and machine operatives £531 1,356,000
Leisure, travel and related personal service occupations £519 331,000
Transport and mobile machine drivers and operatives £453 704,000
Secretarial and related occupations £415 530,000
Elementary trades and related occupations £368 289,000
Elementary administration and service occupations £232 1,992,000
Health professionals £180 1,273,000
Caring personal service occupations £37 1,721,000

ONS: Earnings and hours worked, occupation by two-digit SOC²

Unsurprisingly, and presumably due to dividend payments, corporate managers and directors take home the highest average annual bonus, with just under £8000. After this, professional services under business, media, public service and science tend to do well, averaging just over £2000 a year in incentive pay.

One limitation of the ONS data is that income split by 'occupation' can only be broken down into 2 digit SOC code, rather than more common job title definitions, however it still gives good insight into bonus pay in the UK by job type.
 

How much incentive pay can you expect for your age?

You would assume that the biggest bonuses would be received by seasoned professionals in the latter stages of their career, however, this isn’t always true; below is a breakdown of the average UK private sector bonus by age group:
 

Age Group Average Bonus Jobs
22-29 £1,234.00 2,511,000
30-39 £2,403.00 4,013,000
40-49 £2,879.00 4,151,000
50-59 £2,473.00 3,814,000
60+ £1,252.00 1,106,000

ONS:  Earnings and hours worked, age group³
The data suggests that after a decade or so of full-time working that incentive pay really starts to pick-up.  This is most likely the point where shares, share options, dividends and long-term incentive plans are likely to ‘kick in’ to supplement income.


Who earns higher bonuses: men or women?

The gender pay gap is a big discussion point in the UK today and it looks to be just as much reflected in bonuses as it does in gross annual incentive income:
 

Average Male Bonus 2018: £2,613

Average Female Bonus 2018: £1,158


When broken down by both age and gender, the data points to the cause of the disparity; males between 40-59 tend to earn around twice as much incentive pay as females, taking home an average of £3500 per year:
 

Age Group Male Avg. Incentive Pay Female Avg. Incentive Pay Male vs Female Variance
22-29 £1,503.00 £885.00 +£618
30-39 £2,939.00 £1,526.00 +£1,413
40-49 £3,703.00 £1,552.00 +£2,151
50-59 £3,361.00 £1,195.00 +£2,166
60+ £1,563.00 £633.00 +£930
All £2,613.80 £1,158.20 +£1,455

ONS: Earnings and hours worked in the UK: 2018¹
 

Which UK regions pay the highest bonuses?

Looking at purely private sector incentive pay broken down by region, jobs in London and the South East on average pay significantly higher bonuses than other regions in the UK:
 

Region Average Bonus Jobs
London £6,912 3,339,000
South East £2,213 3,064,000
East £1,772 1,914,000
North West £1,627 2,353,000
Scotland £1,567 1,992,000
West Midlands £1,566 1,870,000
South West £1,489 1,813,000
Yorkshire and The Humber £1,450 1,802,000
East Midlands £1,424 1,515,000
Wales £1,101 971,000
North East Data not available 859,000

ONS: Earnings and hours worked, public & private sector⁴


The data we’ve collated from the ONS suggests that London is effectively ‘another country’ when it comes to incentive pay in the UK.

With the volume and type of commerce in the capital, it’s easy to see how the average bonus is so much higher than other areas throughout the UK. Financial and property sectors thrive in London; likely accounting for a large amount of the incentive pay which brings the average bonus pay to nearly £7000.
 

Private sector bonuses over time

Looking at bonuses more generally, it's interesting to see how incentive pay has evolved over the last 15 years. The graph below breaks down the average private sector incentive income by year:

ONS: Earnings and hours worked, public & private sector

Interestingly, bonuses still haven’t recovered from the recession after 2008 where they peaked at £3,038. In 2018 the average private sector bonus was around £600 lower than this - perhaps caused by the negative connotations of ‘banker bonuses’ in the context of the financial crisis, which has likely reduced the massive bonuses at the top end of the scale.


Sales staff bonuses over time

As a specialist sales recruitment agency, we were particularly interested in how sales professional’s incentive pay has evolved over the same time period, which can be seen from the graph below:

ONS: Earnings and hours worked, occupation by two-digit SOC²


Sales bonuses over the last 15 years peaked in 2011 and the reason for this isn’t clear.  However, we suggest that sales targets were reduced during the ‘lean times’ of 2009 to 2010 and were still at an artificially lower rate in 2011 despite the UK formally coming out of recession.

This could then be the reason why sales incentive pay slumped another 25% in the next two years down to £507 in 2013, as sales targets were raised to the pre-recession levels. Since 2013 the average incentive pay has steadily risen year-on-year but is yet to meet the heights of 2011.


How do the ONS Group ‘Sales Occupations?
The average bonus pay for an employee in a ‘sales occupation’ appears to be lower than you’d expect for the business professional in a selling role.  This is due to the way that the Office For National Statistics defines sales roles to include everything from market and street traders to B2B sales roles resulting in bringing the averages down. Despite this, the trend is still interesting to examine.

 

Commentary

The trends in UK bonuses suggest that the highest amount of incentive pay comes from male workers in the capital during the latter stages of their career. The regional difference within the UK for incentive pay is striking where a full-time private sector worker in London receives on average over three times the bonus of all other regions in the UK.

With the gender pay gap currently being a big talking point in the UK, the difference in incentive pay between men and women only adds to this, with the average full-time working male taking home over double the bonus of a female.

The private sector still looks to have not fully recovered from the controversy around bonuses in pre-recession Britain, with the average full-time earner in the private sector still taking home 20% less incentive pay in 2018 when compared to 2008. One limitation of this study is that the highest bonuses will have skewed the data, where a large amount of incentive pay goes to the people at the top end of the scale: The Guardian recently reported that the average FTSE100 UK Chief Executive took home a stunning £3.9m in total income in 2018⁵.

Looking at the sales industry more closely, the recession also affected bonuses, with the average incentive pay falling 28% between 2008 and 2010. Since then sales bonuses have looked more positive with steady year-on-year growth from 2012 to 2018, however, they are yet to meet the levels of 2011.



 

We welcome use of our data in other studies or articles. Please reference Aaron Wallis Sales Recruitment and www.aaronwallis.co.uk as the author of the study.
 


References

1) Office For National Statistics: Earnings and hours worked in the UK: 2018

2) Office For National Statistics: Earnings and hours worked, occupation by two-digit SOC

3) Office For National Statistics: Earnings and hours worked, age group

4) Office For National Statistics: Earnings and hours worked, public and private sector

5) The Guardian: Top UK Bosses Average Earnings Hit £3.9m

 

About The Research

Aaron Wallis Sales Recruitment has collated data from the Office For National Statistics, analysing and combining different datasets published between 2004 and 2018. Data has been collected from the ONS's Annual Survey of Hours and Earnings (ASHE), which for 2018 was published on the 25th October.

The Annual Survey of Hours and Earnings provides information about the levels, distribution and make-up of earnings and hours paid for employees within industries, occupations and regions in the UK.

Breakdowns are available by gender, full-time/part-time workers as well as by geographies, industrial classification, occupational classification and age groups. These breakdowns are then available for a variety of variables including gross annual income, gross annual incentive pay as well as different time dimensions from months to hours worked.

With a sample size of 1% of earners on PAYE tax taken from HM Revenues and Customs (in real terms around 300,000 people in the UK), the datasets from the ONS provide a valuable and statistically significant insight into earnings of UK citizens.

 


About The Author


Robert Scott, Managing Director of Aaron Wallis

Robert Scott

Managing Director at Aaron Wallis Recruitment

Rob is the Managing Director of Aaron Wallis Sales Recruitment, a national recruitment agency specialising in sourcing sales and marketing staff for businesses across a broad range of commercial sectors. Before setting up Aaron Wallis, Rob spent ten years at a specialist Sales and Marketing recruitment division of a £0.5BN recruitment group, leaving in 2007 as Marketing & Sales Director to establish Aaron Wallis.

With over 20 years experience in recruitment, Rob is a History graduate with an MBA and is a Fellow of the Chartered Management Institute.  In 2007, 2009 and 2013 Rob conducted the most extensive surveys of sales professionals in the UK and is a trusted authority in the sales industry. From guiding employers through the recruitment process to helping candidates find their dream job, Rob's advice has been quoted in leading publications such as Business Insider and The Independent, as well as OnRec, who host The Online Recruitment Awards every year.


Find out more about Rob here.

 

 

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I have always found Rob to be very knowledgeable about our industry sector, and it is refreshing to see after all of these years that Rob continues to quickly and accurately understand my requirements.

HR and General Manager, THK

In an industry where people over promise and under deliver, Rob and his teams have consistently provided a high-quality service. It is great to deal with someone that has an excellent understanding of UK industry, and a passion for sales.

Sales Manager, TR Fasteners

I have used Aaron Wallis to fill a number of our Sales Development Manager roles and I have found them to provide a very professional service. I will use their services again in future recruitment campaigns.

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Giles is highly professional and was a pleasure to work with. He achieves excellent results through his personable skills and tenacity. I have no hesitation in recommending Giles to anyone who considers employing his services.

Commercial Director, G4S Government & Outsourcing Solutions

I just wanted to thank you for your help with our recruitment process which went very smoothly and has – we hope – found us just the person for the job!

Managing Director, Citrefine International Ltd

Thanks for all your help during the recruitment process. I have been extremely impressed with Aaron Wallis especially when compared to other agencies we have dealt with. I really felt you grasped the type of person we required and found strong candidates.

UK Sales Manager, Nexcom

Rob is a true recruitment professional that goes the extra mile that I have never experienced from any other recruitment agency before. If you need sales people call Rob or someone in his team, as they really are experts in sales recruitment.

Sales Director, Inside Business

We were impressed not only by the quality of candidates you found for us but also the level of information, preparation and qualification you put into the process. You continually kept us informed of each person’s feelings about the process, which is very important but often overlooked. I am looking forward to working with your company again in the future.

Commercial Director, Incentive Facilities Management

Since joining DSGi, Rob has been a supplier of permanent staff and has performed to an extremely high standard, successfully filling 98% of roles he has worked on. If anyone is looking for a good sales and marketing based consultancy with an informal yet professional approach, I would recommend Rob.

Senior Recruitment Consultant, DSG International

I really liked the YouTube presentations which made the service seem both simple and accessible. The company came to see me, and my management team, at short notice to present their service and I liked the support and advice that I received about maximising the results from the applicant.

Managing Director, Leisuresec plc

Giles Phillips is a rare find in the minefield of sales recruitment; an honest and thoughtful recruiter who considers the needs of both the client AND the candidate to create perfect role matches. I look forward to working with him again in the future.

Marketing Director, City of London Police

We appointed Aaron Wallis in February and the successful candidate, out of the six which Aaron Wallis introduced, was able to join Alphametrics before the end of April. The whole process took less than three months. I would recommend Aaron Wallis’ services to others without hesitation.

Chief Financial Officer, Alphametrics

Understood the type of person we were looking for and good follow ups - not too frequent.

Managing Director, bigHead Bonding Fasteners Ltd

Rob’s knowledge of the recruitment industry and his thoughts and how to make it better for his clients have always been eye opening. I would recommend Rob to anybody who is looking for a professional, knowledgeable and flexible recruitment specialist.

CEO, Friday Ad Online Services

I found Aaron Wallis to be very professional and efficient, taking time to understand the role and the type of candidate we were looking for. The candidates they put forward met our criteria and were of a high standard. The service they provided was exemplary and I would have no hesitation in recommending them, and will certainly consider using them again in the future.

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I have to say coming across and having dealings with Aaron Wallis proved to be very successful. Being highly experienced did not seem to count for much during my job search bit a conversation with Robert Scott gave me a real confidence boost and enabled to get a position at the age of 63. Great service!!!!!!

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Less than two weeks after joining Aaron Wallis I was offered my new job. I got a £10,000 rise in my basic salary, car allowance, a laptop and many other perks, which will help to further my career. I definitely would not have found my dream job without the help of Aaron Wallis.

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Aaron Wallis (and in particular Rob Scott) have been fantastic throughout the recruitment process, and even a few months down the line, still continues to care. Rob clearly cares about each individual and has a wealth of knowledge and expertise, which shows in the work he does. Each candidate is not just a number, and the support received from Aaron Wallis has helped me get a career which I truly enjoy.

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