Bonuses and Financial Aid to Employees: Documentation and Taxes

How to document a bonus

Types of incentive awards and how they are applied are set by the collective agreement, internal work rules, other labour acts and the employment contract (Article 299 of the Labour Code). Bonuses provided for by the pay system are not incentive awards — they are part of pay, and whether they are paid to an employee under a disciplinary sanction is decided by the bonus policy.

The practical minimum is a bonus policy (targets, amounts, frequency), an order stating the reason and amount, and a payroll statement. While a disciplinary sanction is in force, bonuses outside the pay system and unrelated to performance — for holidays or anniversaries — are not paid (Article 299).

Taxes on bonuses

• PIT at 12% for residents (Article 381 of the Tax Code): incentive payments — year-end awards, bonuses under the bonus policy, one-off bonuses unrelated to performance, holiday supplements — are employment income (Articles 371, 372);
• social tax at 12% (25% for budget organisations): the base is payments under Article 371, so bonuses are included (Articles 404, 405);
• profit tax: a bonus is a labour cost and is deductible subject to the general conditions of justification and documentation (Article 305);
• in the books, bonuses to production staff under the bonus policy go into production cost (para 1.2.1 of the Regulation on Cost Composition), while one-off bonuses and year-end awards are other operating expenses (para 2.3.8.2).

Financial aid: two different regimes

The Tax Code classifies financial aid given for specific reasons as "other income" (Article 377(10)):

• to family members of a deceased employee or to an employee on the death of a family member;
• to an employee in connection with a work injury, occupational disease or other harm to health;
• as payments on the birth of a child or the marriage of the employee or their children;
• as agricultural produce or funds to buy it.

Taxes on financial aid

Financial aid under Article 377(10) is exempt from PIT up to 4.22 times the minimum wage: on the death of an employee or a family member — up to 4.22 times, in the other cases of Article 377 — up to 4.22 times per tax period (Article 378(1)). The excess is subject to PIT. Since it is not employment income, no social tax is charged — the social tax base is payments under Article 371.

Any other financial aid — for example, "for holidays" or "for a festival" — is an incentive payment (Article 372(4)) and is taxed like salary: PIT and social tax. With a minimum wage of UZS 1,360,000 (from 1 September 2026, Presidential Decree UP-115), the Article 378(1) limit is 4.22 × 1,360,000 = UZS 5,739,200.

• financial aid in connection with emergencies within the amount of damage suffered is not the employee's income (Article 369);
• payments by the trade union committee, including financial aid to union members from membership dues, are not income (Article 369);
• employer payment for medical services for employees and their children is exempt from PIT when paid by bank transfer to the medical institution or given in cash against the institution's documents (Article 378(3)).

Financial aid and profit tax

Under Article 317(6) of the Tax Code, financial aid listed in the fourth and fifth paragraphs of Article 377(10) is not deductible — according to the text of the article, these are payments on the birth of a child or marriage, and agricultural produce or funds to buy it. In the books, financial aid paid to employees is an other operating expense (para 2.3.9.4 of the Regulation on Cost Composition).

Financial aid taxed as an incentive payment is a labour cost and is deductible on general grounds. So the reason stated in the order matters not only for PIT but also for profit tax.