The end of the year sneaks up fast in a veterinary practice. One minute we’re juggling dentals, emergencies, and three same-day euthanasia requests, and the next minute it’s December and everyone is asking: “Are we doing bonuses this year?”

If you’re a practice owner or manager, you already know bonuses aren’t as simple as issuing a check. They influence culture, morale, expectations, and, if we’re being honest, our own emotions. Hopefully, you can use this as a guide to walk you through different bonus options, be prepared for the realities of how teams respond, decide how to best protect your practice financially, and how to protect yourself during what can be a vulnerable moment as a leader.

Be Careful About the Precedent You Set

One of the biggest challenges with bonuses is that once you start giving them, and especially once you give a big one, it’s almost impossible to go backward. It’s the classic toothpaste analogy: once it’s out of the tube, good luck getting it back in.

You want a bonus method that survives the years when you had a big unexpected equipment purchase, when a doctor went on maternity leave, or when your appointment book softened for reasons that don’t become clear until months later. If you give a larger bonus one year because you had an unusually great financial season, label it clearly as a “one-time discretionary bonus,” not the start of a new tradition.

Accept That Your Team Will Compare Notes

Owners often hold onto hope that people won’t talk.
They will. They always do.

Once bonuses go out, conversations will happen in the break room, by the lockers, in group texts, and sometimes loudly in the treatment area while you’re trying to scrub in for surgery. This is normal human behavior, not a sign that your team is ungrateful or dramatic.

The goal isn’t to stop people from comparing; it’s to choose a structure you can confidently stand behind when they do. If your reasoning is fair, consistent, and clearly communicated, you’ll feel far less anxious about the inevitable chatter.

Choosing the Right Bonus Structure

There isn’t a single correct way to do bonuses in vet med, and every model sends a slightly different message. Some practices prefer a flat-rate bonus, where everyone receives the same amount regardless of role or tenure. This keeps things simple, avoids big discrepancies, and helps support staff feel appreciated. It also keeps the focus on teamwide gratitude rather than individual performance.

Other practices choose a percentage of salary, typically in the 1–3% range. This gives larger bonuses to employees with more responsibility and seniority, and it scales automatically year over year. Managers often like this model because it feels structured and predictable.

A growing number of clinics connect bonuses to core values mini-reviews. Instead of relying strictly on tenure or position, owners evaluate how well each team member upheld values like communication, teamwork, patient care, and accountability. It’s a great way to reinforce culture, especially during years when drama, burnout, or inconsistency crept in.

Some practices go an entirely different direction and tie bonuses to practice growth. If the practice increased revenue or profitability year over year, the team shares in that success. This approach also builds in natural flexibility: in a slow year, the bonus pool is smaller. In a strong year, everyone benefits.

Some practices choose to structure bonuses around holiday closures, especially when the practice closes for extra days that aren’t technically paid holidays. For example, Christmas Day may be a paid holiday, but many practices also close on Christmas Eve and the day after Christmas. In this situation, a holiday bonus can simply cover the income staff lose when the practice is closed. The holiday bonus can be equal to the wages they would have earned on those two unpaid days. This approach is clean, predictable, easy to communicate and keeps paychecks steady during a high-expense time of year and reduces confusion or resentment about lost hours while still protecting your practice’s budget.

Prepare Yourself Emotionally for Mixed Reactions

This is the part most owners don’t talk about, but it’s so real.

You might hand someone a thoughtful, generous bonus, and instead of the smile or thank you you’re expecting, they freeze, look confused, or say nothing. Sometimes people even look disappointed.

It hurts. Even when you know logically that bonuses aren’t about gratitude, it still stings.

But remember that money can be an emotional or awkward topic for employees, especially those who weren’t expecting a bonus or who worry about being compared to their coworkers. Some people don’t know how to react, some feel shy, and some are so overwhelmed by the season that they barely register the moment.

If you go in expecting a range of reactions, from deeply appreciative to mildly uncomfortable, you’ll protect your own peace.

Timing: December vs. January (and Why Your CPA Should Weigh In)

Before you decide anything, talk to us. Depending on your financial situation, it may be more beneficial to issue bonuses before December 31 to reduce your taxable income, or in January to push the expense into the next tax year.

If you do end up paying bonuses in January, transparency is your friend. Your team doesn’t need the IRS explanation; they just need the practical one:

“We’re shifting some bonuses to the January payroll this year because it supports financial stability during Q1. The amounts aren’t changing, just the date.”

Some practices thread the needle by giving support staff their holiday bonuses in December, because it impacts their holiday spending, and then giving managers and associates their performance-based bonuses in January if that’s more beneficial from a tax perspective.

Bonuses Must Be Processed Through Payroll

This is non-negotiable and often misunderstood. Bonuses must be run through payroll so taxes are withheld correctly. That typically means doing a separate bonus payroll run, clearly labeled as supplemental wages.

It’s tempting to hand out cash or write personal checks, especially for smaller bonuses, but doing so creates tax problems for both you and the employee. Running bonuses through payroll is cleaner, safer, and keeps your books audit-ready, which we absolutely appreciate.

Holiday bonuses are never just financial: they’re cultural, emotional, and deeply tied to how your team experiences your leadership. The best bonus structure is one that feels fair, sustainable, and aligned with your practice’s values. Choose the method you can explain calmly and repeat annually without resentment. Communicate clearly. Protect your heart. And remember that you’re doing your best to show appreciation in an industry that runs on compassion and exhaustion.

And if you want to talk through different ways to structure your bonuses, let’s talk about it! We’re here to help.

Written by Meghan Bingham, CVPM