December bonuses fell 5.1% YoY for workers at small retail companies

Year-end bonuses for employees of small businesses rose an average of 11.5% in December over 2024, from $2,502 to $2,709, according to a new report from Gusto, the payroll and benefits platform. But the retail sector lagged behind, with bonuses dipping from an average of $1,597 to $1,516, a 5.1% drop.

Gusto defines small businesses as those with fewer than 50 employees.

Among the 15 small-biz sectors Gusto measured, retail was one of only four where the bonuses didn’t increase over the previous year. Only one sector, education, saw a steeper decline, with its average year-end bonuses dipping 10.2%, from $1,538 to $1,381.

While those bonuses for retail were smaller, more workers got them, with 18.5% scoring an end-of-year bump, compared to 17.4% in 2024. That puts the retail sector slightly above the average for the breadth of employees who got bonuses, with the average among all sectors rising to 18%, from 16.7% in 2024.

Retail’s piping hot cousins, the food and beverage sector, saw year-end bonuses grow 4.8% over 2024, to $504, while the percentage of its workers pocketing a bonus also grew over the period, from 6.7% to 7.4%.

As for workplaces with 50 employees or more, a December report from ADP (which didn’t break out the retail sector) had the grim title, “The disappearing annual bonus.” The report found that the percentage of US employees receiving bonuses throughout the year fell from 43.7% in 2021 to 39.7% in 2024.

No matter what sector employees work in, bonuses can be a boon for retailers. Asked what they plan to splurge on with their bonuses, the most popular response was gifts for the family (27%), while 12% planned to buy high-end appliances, according to a 2023 survey by Empower.