Guide
How to Calculate a STIP Bonus
Use this guide when you need the formula behind a STIP or STI plan before using the calculator.
STIP formula
STIP payout = salary × target bonus % × company factor × team factor × individual factor × eligibility
The exact plan may use different weights, but the practical structure is target value adjusted by performance factors.
Weighted scorecard example
| Metric | Weight | Score | Weighted result |
|---|---|---|---|
| Company performance | 50% | 110% | 55% |
| Team performance | 25% | 100% | 25% |
| Individual performance | 25% | 90% | 22.5% |
Total weighted performance is 102.5 percent before caps or eligibility.
Common reasons the payout changes
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Company factor missed threshold.
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Eligibility was prorated because the employee joined mid year.
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The plan has a maximum payout cap.
Related tools and next steps
FAQ
Is STIP taxable?
Most cash bonus payments are normally treated as taxable compensation, but payroll treatment depends on jurisdiction and employer process.
Is STIP guaranteed?
Usually no. STIP payouts often depend on company, team and individual performance plus plan eligibility.