"An annual bonus, also known as a yearly bonus or year-end bonus, is a lump-sum payment made once a year by a company to its employees, over and above their annual salaries. This amount is usually based on the company's overall performance for that year, although it sometimes also depends on an employee's individual performance during that same period.

Annual bonus examples include:

• A trading company announcing a fixed $2000 bonus for each employee at the end of a good year.
• A software firm declaring annual bonuses ranging from 5-11% for each of its employees, depending on how well they did that year.

It is not uncommon for companies that have had a successful year to announce a fixed annual bonus for each employee, irrespective of their individual performances. On the other hand, you will also come across companies that offer annual bonuses as a percentage of the employee's salary. In the latter case, the annual bonus will differ for each employee, depending on their base salary as well as certain performance metrics."