STIP bonus calculator
Calculate a STIP or STI payout using company, team and individual payout factors multiplied together, followed by eligibility and a cap. This model is for multiplicative plans; weighted scorecards use a different formula.
Last reviewed 8 October 2026
What is a STIP bonus?
STIP stands for Short-Term Incentive Plan — a performance bonus measured over a short performance period, often paid in cash after the period closes. STI commonly names the incentive and STIP the plan that governs it; employers may define these terms differently. When paid through payroll it may appear as a separate line from base salary, and it is variable by design: the amount depends on how the company and you performed, not just on your salary.
This calculator starts with salary × target bonus percentage, then multiplies company, team and individual payout factors and eligibility. It caps the result against the full-period target bonus. Use your plan’s factors and cap; the defaults are examples, not market benchmarks.
Target bonus × company factor × team factor × individual factor × eligibility, limited by the full-target cap. A weighted average of performance scores is a different model.
Educational estimate only. This is not payroll, tax, legal or HR advice.
Scorecard logic
This tool models a multiplicative scorecard: salary times target bonus, then company, team, individual and eligibility factors. A weighted scorecard needs a different calculation.
| Performance level | Illustrative multiplier | Meaning |
|---|---|---|
| Threshold | 50% | Minimum payout level once plan goals are reached. |
| Target | 100% | Expected payout when plan goals are met. |
| Stretch | 125% to 200% | Higher payout for overachievement, often capped. |
STIP, STI and short term incentive wording
Employers may use STI, STIP and short-term incentive for related awards. Check your plan’s definition and whether it multiplies factors, adds weighted scores or uses a threshold.
When not to use this page
For a simple salary percentage, use the gross bonus pay calculator. For a fixed team budget that must be divided among participants, use the bonus pool allocation calculator. This STIP tool models one person’s gross payout, not payroll withholding.
Related tools and next steps
Worked example: a $90,000 salary with a 15% target STIP
Take a $90,000 base salary with a 15% target bonus. The target payout is $13,500. Apply a 110% company multiplier, a 95% team score and a 100% individual score, at full (100%) eligibility. The scorecard payout is 13,500 × 1.10 × 0.95 × 1.00 × 1.00 = $14,107.50, well under the 200% cap of $27,000.
Educational gross estimate only — not payroll, tax or HR advice.
STIP and STI calculation questions
What inputs matter most in a STIP calculation?
The core inputs are target bonus, company multiplier, team or business unit score, individual score, eligibility and any payout cap.
What is the STIP formula?
Salary × target bonus % gives the target payout, then you multiply by company, team and individual performance factors and eligibility, and finally apply any payout cap.
Is STIP the same as STI?
STIP commonly names the short-term incentive plan; STI commonly names the incentive. Employers may use the labels differently, so read your own plan definitions.
Why is my STIP lower than target?
Usually because company or team results landed below 100%, your individual score was under target, eligibility was prorated, or a modifier or cap reduced the payout.
What is a typical STIP target percentage?
There is no universal target percentage. Use the percentage in your plan or offer, then check the performance conditions, eligibility and cap before treating it as expected pay.
How does a payout cap work?
The cap limits the payout to the entered percentage of the full-period target bonus in this tool. A zero cap means zero payable bonus. Other plans may cap the prorated target; use the payout calculator to compare those bases.
Multiplicative factors or weighted scores?
At a $10,000 target, multiplying 120% company performance by 80% individual performance gives $9,600. Weighting those two factors equally gives $10,000. These are different plan formulas, not rounding differences.
Use the AIP weighted calculator when company and individual weights sum to 100%. Use the payout curve calculator for threshold, target, stretch and a choice of cap basis.