You can employ a bonus letter template to formally recognize and reward an employee's outstanding performance or the achievement of specific, measurable goals. Use this email template to announce performance bonuses to your employees.The bonus letter should include details such as the bonus amount, the reason for the bonus, and any performance criteria used to determine it. An incentive bonus agreement is a contract between an employer and employee that details information about a cash bonus offered as an incentive. The purpose of the bonus policy is to: Motivate Employees: Encourage high performance and commitment to the company's objectives. This employee bonus policy template is ready to be tailored to your company's needs and can be a starting point for setting up your employment policies. An incentive bonus agreement is a contract between an employer and employee that details information about a cash bonus offered as an incentive. In addition, only the annual salary was quoted in the letter, which implied that the employment was guaranteed for a year. A prize awarded to a participant in a game or "reality" show is considered non-employee compensation for Pennsylvania personal income tax purposes. A bonus plan is an agreement between the employer and employee to pay out a predetermined amount of money based on performance.