My employer refused to pay my bonus: can they?

December pay should land with a bonus attached. When it does not, do not accept “it is discretionary” as the end of the story. Many bonuses are wages in law, and even a truly discretionary bonus must be decided fairly.

What type is your bonus?

Everything turns on this question. Find your contract, offer letter, bonus scheme rules and any emails about targets. Look for the exact words used about payment.

A bonus can become contractual even if the paperwork calls it discretionary. A clear promise made to staff, even outside the written contract, can bind an employer (see Dresdner Kleinwort v Attrill [2013] EWCA Civ 394), and a bonus paid the same way for years can become part of the contract through custom and practice. If staff in your shop, warehouse or care home all got the same Christmas payment for four years running, ask why this year is different.

The control on discretion is real. A contractual discretion must be exercised rationally and in good faith, not arbitrarily or perversely. That is the rule in Braganza v BP Shipping Ltd [2015] UKSC 17, and the Court of Appeal had already taken the same approach to bonuses in Commerzbank AG v Keen [2006] EWCA Civ 1536 and Cantor Fitzgerald International v Horkulak [2004] EWCA Civ 1287. “We just decided not to” is not a reason. Ask for the criteria, your scores against them, and the decision in writing.

If you quit in January or work your notice

This is where most new-year bonuses are lost. Many schemes say the bonus is “payable only to employees in service and not under notice on the payment date”. Acas confirms these clauses are common and can be enforced.

Take the retail case. A sales assistant earns a contractual peak bonus of 3% of her own December sales. She sells £18,000 of stock in December. The maths is 0.03 x 18,000 = £540, payable on 15 January. She resigns on 28 December to start a new job. On 15 January she is under notice. If that forfeiture clause is in her contract, the £540 is lost. If no such clause exists and she hit the target, the £540 is wages and non-payment is a deduction.

Three limits protect you. First, the clause must actually exist in writing. A tribunal will not imply one. Second, a sacking arranged to cheat you out of an earned bonus can be challenged. In Takacs v Barclays Services Jersey Ltd [2006] IRLR 877 the High Court refused to strike out a claim that an implied term stops an employer dismissing a worker to avoid paying a bonus; the case settled before trial, so it is persuasive at most and not settled law, but worth raising. Until January 2027 most workers with under two years’ service still lack ordinary unfair dismissal protection, so employers who time sackings to dodge a bonus currently carry little risk on that front. Third, check your notice period dates carefully. If you left after the payment date and were not under notice on that date, the clause does not bite.

How to claim an unpaid contractual bonus

A contractual bonus that has fallen due counts as wages under section 27(1)(a) of the Employment Rights Act 1996, which lists “any fee, bonus, commission” as wages. Withholding it is a deduction under sections 13 to 15: the gap between what should have been paid and what was paid (see Delaney v Staples [1992] ICR 483).

You have two main routes. The right one depends on whether you still work there.

If you are still employed and want the tribunal route, use unlawful deduction, not breach of contract. The tribunal can only hear a pure contract claim after the job has ended, under the Extension of Jurisdiction Orders 1994. In court there is no £25,000 cap, but you pay an issue fee and the process is slower. For detail on clocks and conciliation, see our guide to employment tribunal time limits.

Sick leave, maternity leave and attendance bonuses

Peak-season attendance schemes often say one sick day wipes out the whole bonus. That can be unlawful.

Company-wide bonuses still belong to staff on sick leave or maternity leave. A firm that pays every warehouse picker a £200 peak bonus cannot cut out the picker who was off with flu, if the bonus rewards company performance rather than personal attendance.

For individual or attendance bonuses, the rules split:

On sick leave linked to disability, docking pay can be discrimination arising from disability under section 15 of the Equality Act 2010, unless the employer shows it was a proportionate way to meet a legitimate aim. Indirect disability discrimination under section 19 can also apply. If the sum was contractually earned, bring the unlawful deduction claim alongside. For the absence process itself, see absence triggers and the Bradford factor.

Take the care example. A care worker on 32 hours at £12.71 an hour, the minimum rate for ages 21 and over since April 2026, has a £40 weekly attendance bonus, and her scheme voids the whole month’s bonus, £160, for a single sick day. She misses two days in one month because of a long-term condition that counts as a disability. Taking the whole £160 because of disability-related absence needs justification. A blanket “any absence, no bonus” rule will struggle to pass that test.

On maternity leave, a company-performance bonus must be paid in full. An individual-performance bonus may be pro-rated for time on ordinary and additional maternity leave, but compulsory maternity leave (two weeks, four weeks for factory work) and keeping-in-touch days count as time worked. Withholding it can be maternity discrimination under section 18 and an unlawful deduction. A fair pro-rata reduction is lawful: the Court of Session upheld one for ordinary maternity leave in Hoyland v Asda Stores Ltd [2006] IRLR 468. Our guide explains pregnancy and maternity discrimination in full.

Agency, zero-hours and part-time staff

Seasonal bonuses often skip the very staff who worked the peak. The law does not always allow that.

Employees get the full package: deduction claims, contract claims and Equality Act protection. Limb (b) workers, including many casual, zero-hours and gig staff, can bring unlawful deduction claims as workers, and Equality Act cover extends to contract workers, but they enforce pure contract terms through the civil courts while engaged. If you were told you are self-employed but work under control to a rota, check your employment status; many care and delivery contractors are workers in law (see Uber v Aslam [2021] UKSC 5).

Agency workers are protected against deductions by the agency. After 12 weeks in the same role, Agency Workers Regulations 2010 regulations 5 and 6 give equal treatment on pay linked to the amount or quality of work, such as a pick-rate bonus. Bonuses given purely for loyalty or long service, like many Christmas gifts, are excluded. Ask which pot your bonus came from.

Part-time and fixed-term staff must be treated no less favourably on a pro-rata basis unless the employer can objectively justify the difference. A £300 full-time Christmas bonus should mean £180 for a worker on three days out of five who met the same targets. Tips and service charges are different: since 1 October 2024 they must go to staff in full under the Employment (Allocation of Tips) Act 2023. If your “bonus” is really a tronc share, read tips and service charge rights.

What changed in October 2026, and what is still coming

The Employment Rights Act 2025 doubled most tribunal time limits from three months to six months. The change is now in force, but only for new acts. Older deductions keep the old clock.

1. 6 Apr 2026Sick pay from day one

   The lower earnings limit and waiting days for Statutory Sick Pay were removed. Relevant where a sick day costs you both wages and a bonus.

2. 1 Oct 2026Six-month tribunal limits live

   Unlawful deductions, discrimination and, in England and Wales, breach of contract claims move to six months for acts on or after this date (Employment Rights Act 2025 section 152, Commencement Regulations SI 2026/954).

3. 9 Nov 2026Scotland contract claims follow

   The six-month limit for tribunal breach of contract claims starts in Scotland under its own 1994 Jurisdiction Order.

4. 1 Jan 2027Dismissal protection tightens

   Unfair dismissal qualifying period falls to six months and fire-and-rehire rules strengthen. Relevant if you are sacked just before a bonus pays out.

In Northern Ireland the six-month extension does not apply unless Stormont legislates, and none is announced. Deduction claims there run under the Employment Rights (Northern Ireland) Order 1996 and keep the three-month clock. Contract claims are also three months with the same £25,000 cap. See how Northern Ireland differs.

What to do now: five steps

1. Pin down the term. Get the bonus clause, scheme booklet and target letter. Note the payment date, the “in service and not under notice” wording if any, and whether targets are company or individual.
2. Do the maths. Work out what fell due, when it should have been paid and what you received. If bonuses were skipped year after year, that may be a series of deductions, and if a tribunal accepts that, one in-time claim can reach back through it, though tribunal arrears still stop two years before you present. Court allows six years in England and Wales.
3. Challenge in writing. Email payroll and your manager: state the clause, show you met it, attach proof, and ask for payment within seven days plus written reasons if refused. Keep it calm and short.
4. Get free help. Talk to Acas for conciliation, Citizens Advice or a law centre for the claim, and your union: USDAW for retail, GMB or Unite for warehouses and logistics, UNISON for care. Our union finder lists the right one for your job. Membership buys advice and representation for what comes next.
5. Start the clock. Contact Acas for early conciliation before the deadline expires; the clock pauses while you conciliate. Then file to the tribunal for a deduction or, after leaving, a contract claim under £25,000, or go to the county court or sheriff court while employed or for larger sums. See final pay rights if the bonus sits in your last payslip.