"2023 Sees 21% Reduction in Year-End Bonuses: Navigating a Smaller Reward"
Year-end bonuses in 2023 were smaller than in previous years, averaging $2,145, down from $2,730 in 2022. The decrease is attributed to a relatively stable job market and employers feeling the pinch of inflation. Workers who received bonuses should consider the tax implications, as a large bonus could push them into a higher tax bracket. Strategies to reduce the tax burden include deferring the bonus to the following year, maximizing retirement contributions, and contributing to a Health Savings Account. Additionally, experts recommend paying off debts, building emergency savings, and investing cautiously if employees haven't already spent their bonuses.