Ex Gratia vs. Bonus — What's the Difference?
Edited by Tayyaba Rehman — By Fiza Rafique — Published on November 13, 2023
Ex Gratia refers to payments made out of goodwill without any legal obligation; a Bonus is an extra payment given for good performance or as a benefit.
Difference Between Ex Gratia and Bonus
Table of Contents
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Key Differences
Ex Gratia represents a gesture made purely out of kindness, with no legal compulsion behind it, whereas a Bonus is typically tied to performance, company profits, or set as a benefit by the employer.
When employers provide Ex Gratia, they're making clear that there's no legal necessity behind the payment. In contrast, many employment contracts or company policies may stipulate conditions under which a Bonus is given, indicating a more formalized and expected nature.
It's interesting to note the motivation behind both payments. Ex Gratia comes from the Latin for "out of grace," emphasizing its voluntary nature. Bonuses, however, are usually seen as incentives, aimed at motivating employees or rewarding them for surpassing expectations.
Ex Gratia payments can be seen in various contexts, not just employment. For instance, they might be given as a gesture of goodwill following a service disruption. Bonuses, on the other hand, are typically associated with workplaces, as a part of salary packages or as year-end benefits.
In summary, while both Ex Gratia and Bonus involve extra payments beyond regular wages or prices, Ex Gratia is characterized by its spontaneous and voluntary nature, and Bonus is more systematic and often tied to certain conditions or performances.
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Comparison Chart
Basis of Payment
Goodwill without legal obligation
Performance, company profits, or set benefits
Origin
Latin for "out of grace"
From Latin "bonum" meaning "good"
Typical Context
Various, including compensation for disruptions
Employment, typically as incentives or year-end benefits
Legal Obligation
None
Can be stipulated in employment contracts or company policies
Primary Motivation
Kindness, goodwill
Incentivize, reward performance
Compare with Definitions
Ex Gratia
Ex Gratia originates from Latin, meaning "out of grace."
The Ex Gratia gesture was appreciated by everyone.
Bonus
Bonus is often stipulated in employment contracts.
He accepted the job offer because of the attractive Bonus structure.
Ex Gratia
Ex Gratia is often given as a sign of compassion or apology.
Following the incident, the firm decided to make an Ex Gratia payment.
Bonus
Bonus can be tied to individual or company performance.
If the company hits its annual target, employees receive a Bonus.
Ex Gratia
Ex Gratia signifies a voluntary gesture without any legal binding.
Despite not being at fault, they made an Ex Gratia offer to the affected party.
Bonus
Bonus is an extra payment received over one's regular salary.
She used her Bonus to buy a new car.
Ex Gratia
Ex Gratia is a payment made out of goodwill.
The company issued an Ex Gratia payment to customers after the service outage.
Bonus
Bonus often serves as an incentive or reward.
The yearly Bonus motivates employees to perform their best.
Ex Gratia
Ex Gratia is not linked to performance or obligations.
He was surprised to receive an Ex Gratia amount in his account.
Bonus
Something given or paid in addition to what is usual or expected.
Bonus
A sum of money or an equivalent given to an employee in addition to the employee's usual compensation.
Bonus
A sum of money in addition to salary that is given to a professional athlete for signing up with a team.
Bonus
A subsidy from a government to an industry.
Bonus
A sum of money paid by a government to a war veteran.
Bonus
A premium, as of stock, that is given by a corporation to another party, such as a purchaser of its securities.
Bonus
A sum of money that is paid by a corporation in excess of interest or royalties charged for the granting of a privilege or a loan to that corporation.
Bonus
(Basketball) An additional free throw awarded to a player who has been fouled when the opposing team has committed more than a specified number of fouls during a period of play.
Bonus
Something extra that is good; an added benefit.
Bonus
An extra sum given as a premium, e.g. to an employee or to a shareholder.
The employee of the week receives a bonus for his excellent work.
Bonus
(video games) An addition to the player's score based on performance, e.g. for time remaining.
Bonus
(basketball) One or more free throws awarded to a team when the opposing team has accumulated enough fouls.
Bonus
(transitive) To pay a bonus, premium
Bonus
A premium given for a loan, or for a charter or other privilege granted to a company; as the bank paid a bonus for its charter.
Bonus
An extra dividend to the shareholders of a joint stock company, out of accumulated profits.
Bonus
Money paid in addition to a stated compensation.
Bonus
Anything that tends to arouse;
His approval was an added fillip
Bonus
An additional payment (or other remuneration) to employees as a means of increasing output
Bonus
Bonus can also refer to any extra benefit or feature.
The product comes with a Bonus accessory.
Common Curiosities
Is a Bonus always tied to performance?
Often, but not always. A Bonus can be tied to performance, company profits, or set as a contractual benefit.
Can Ex Gratia be given to anyone?
Yes, Ex Gratia can be given to anyone as a gesture of goodwill or apology.
Is a Christmas Bonus an example of Ex Gratia?
It depends. If it's given without obligation, it's Ex Gratia. If it's expected or contractual, it's a Bonus.
What's the origin of the term Ex Gratia?
It comes from Latin, meaning "out of grace."
What does Ex Gratia signify in payments?
Ex Gratia signifies payments made purely out of goodwill, without any legal obligation.
Is Ex Gratia common in employment contracts?
No, Ex Gratia is typically not part of contracts since it denotes a payment without legal obligation.
Can Ex Gratia be seen as compensation?
Yes, Ex Gratia can sometimes be given as compensation, especially in cases of goodwill gestures.
Can a company be legally forced to give a Bonus?
If a Bonus is stipulated in an employment contract or company policy, then yes.
What motivates companies to give bonuses?
Bonuses can motivate employees, reward exceptional work, or be part of a contractual benefit.
How is a Bonus different from a commission?
A Bonus is typically a one-time payment, while a commission is usually a percentage of sales or deals made.
Are bonuses taxable?
Yes, in most jurisdictions, bonuses are considered taxable income.
Can Ex Gratia payments be large?
Ex Gratia amounts can vary widely based on the giver's discretion.
Can a company retract an Ex Gratia offer?
Since Ex Gratia is voluntary, companies may have the discretion to retract, unless otherwise stipulated.
Do all employees typically receive the same Bonus amount?
Not necessarily. Bonus amounts can vary based on performance, position, or other criteria.
Are Ex Gratia payments common in specific industries?
Ex Gratia payments can occur in any industry, especially when companies want to make goodwill gestures.
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Written by
Fiza RafiqueFiza Rafique is a skilled content writer at AskDifference.com, where she meticulously refines and enhances written pieces. Drawing from her vast editorial expertise, Fiza ensures clarity, accuracy, and precision in every article. Passionate about language, she continually seeks to elevate the quality of content for readers worldwide.
Edited by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
