Bonuses are less costly to the organization than general wage increases, because

Exam Question

Bonuses are less costly to the organization than general wage increases, because

• 1. bonuses receive preferential tax treatment
• 2. the annual amount given as a bonus tends to be smaller than the annual amount given as a raise
• 3. bonuses are frequently given in the form of non-cash items
• 4. bonuses do not become part of employees’ base wages

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