Bonus and Incentive Accrual Template
One document and four sheets that turn the plan's own EBITDA formula into a quarterly accrual, re-estimated instead of guessed.
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Pool and Tier Calculation
[Company] — the plan's own formula, re-run every quarter
Full-Year Pool Estimate is what the plan's tiers produce against the current forecast, not a flat percentage of target carried forward from January.
| Quarter | Full-Year EBITDA | Tier 2 Pool | Tier 3 Pool | Full-Year Pool Estimate |
|---|---|---|---|---|
| — | — | — | — | — |
| — | — | — | — | — |
| — | — | — | — | — |
| — | — | — | — | — |
Full-Year Pool Estimate only fills in once each tier is run against the plan's own thresholds, never against a single blended attainment percentage.
Bracknell Sensing Corp's management incentive plan pays 0 percent of EBITDA up to $4,000,000.00, 6 percent from $4,000,000.00 to $5,500,000.00, and 10 percent above it. At the first quarter's $5,000,000.00 full-year forecast the formula produces a $60,000.00 pool; three re-estimates later, on an actual $6,200,000.00, it produces $160,000.00. A flat percentage-of-target guess, the same shortcut an employee cost and utilization template exists to replace on the salary side, would have carried one number all year and missed the other three entirely.
That swing is not one number, it is two. True-up Schedule splits every quarter's expense into service cost, this quarter's own accrual at the current estimate, and a re-estimation catch-up, the effect of repricing every prior quarter at the new number. On the third quarter, the pool estimate rises $20,000.00 and the quarter's expense is $45,000.00: $35,000.00 of that is Q3's own service cost, and $10,000.00 is Q1 and Q2 repriced at the new figure.
The bigger gap is what happens when someone leaves. Tobias Renwick resigns 20 January 2027, after the year closes and before bonuses pay, and his $26,666.67 accrued share does not simply disappear. Revenue Ruling 2011-29 lets an employer fix a bonus pool's aggregate liability at year end without knowing which individual gets what, provided a forfeited share is reallocated rather than reverting to the company. That is exactly what Accrual by Person does with his redistributed $8,888.89 to $10,666.67 per remaining participant.
What's in the pack
Accrual Basis Memo
Why the plan's formula satisfies the all-events test, and the Treasury Regulation 1.404(b)-1T-1T) payment-date rule that decides which tax year the deduction actually falls in.
Pool and Tier Calculation sheet
The plan's own tiered EBITDA formula, re-run every quarter against management's updated full-year forecast instead of one flat percentage carried forward.
Attainment Tracking sheet
The cumulative accrual required to date, given how much of the fiscal year has elapsed and what the current forecast produces, plus the resulting quarter expense.
True-up Schedule sheet
Every quarter's expense split into its own service cost and the re-estimation catch-up from repricing prior quarters, so a forecast revision reads as exactly what it is.
Accrual by Person sheet
Each participant's cumulative accrued balance by quarter, and what a departing participant's forfeited share is reallocated to, the same per-person logic commission calculation applies deal by deal instead of quarter by quarter.
Space rule
A forfeited share is reallocated, never dropped. It governs every prompt here, because reallocation instead of reversion is what keeps the pool's aggregate liability fixed at year end.
How to use it
- 1
Open in River, or download it
Open the pack in River and let the agent build it from your own plan and performance data, or download the blank Word and CSV files instantly with no account.
- 2
Send the plan and the performance data
The incentive plan document itself, whatever performance data the formula runs on, and your participant roster with each person's target weight.
- 3
Run the formula, then the quarterlies
Accrual Basis Memo states the tiers and the payment deadline first, then Pool and Tier Calculation and Attainment Tracking roll the estimate forward each quarter.
- 4
Process a departure against the plan's clause
True-up Schedule explains the swing, and if someone leaves before payment, Accrual by Person reallocates their share against what the plan document actually says.
Frequently asked questions
Is this template free?
Yes, all of it. The Word document and four CSV sheets, no signup, no card required. Edit with AI is a separate, optional route for anyone who would rather hand over their own plan and performance data than build the sheets by hand.
Why does the pool change every quarter if EBITDA is only known once a year?
Because the accrual cannot wait for December. Every quarter but the last runs the plan's own formula against management's updated full-year forecast, not the actual final figure, and Attainment Tracking scales that estimate by how much of the year has elapsed. The estimate moving is normal; True-up Schedule is what keeps that movement from reading as an error.
What actually happens to a departing participant's forfeited share?
It depends on what the plan document says. Revenue Ruling 2011-29 lets an employer fix a bonus pool's aggregate liability at year end without knowing which employee gets what, but only when a forfeited share is reallocated among the remaining participants rather than reverting to the company. Accrual by Person checks the plan's own forfeiture language before assuming either answer.
Does the payment date actually matter, or is it just a scheduling detail?
It matters more than the accrual math. Compensation paid within two and a half months of fiscal year end is not deferred compensation; paid after that date, the deduction moves to the year the employee actually receives it, regardless of when it was booked. Accrual Basis Memo states the plan's specific deadline and confirms whether the scheduled payment clears it.
How is this different from the bonus line in the payroll journal pack?
Scale and mechanism. The payroll journal and accrual pack carries a bonus as one row against a single attainment ratio inside a much wider payroll entry. This pack is for when the plan itself is tiered, the pool needs re-estimating every quarter as performance data arrives, and a departure has to be reallocated against the plan's own clause rather than assumed.
Is this the same thing as calculating sales commission?
No. A commission plan pays each rep against their own deals as those deals close; an EBITDA-tiered incentive pool pays a group of participants against one company-wide performance figure, known only once a year, split by target weight. The mechanics that matter are different enough that sales commission is built as its own pack rather than a variant of this one.
What format are the downloaded files?
One .docx document covering the accrual basis, plus four .csv sheets, all zipped into one file. Everything opens natively in Word, Pages, Google Docs, Excel, Numbers and Sheets, with no conversion step and no macro to enable before the formulas work.
Accrue the pool the plan's own formula produces
Download the blank pack as Word and CSV files, or open this exact pack in River and let the agent build it from your own incentive plan.
Edit with AI