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Bonus Calculation Formula in Excel

This tutorial explains how to use Excel to compute the Bonus. To be more exact, we will use Excel to determine the sales bonus here. Employees typically receive sales bonuses for reaching milestones, exceeding performance targets, and accomplishing work goals. Here, we'll walk you through five quick and simple ways to figure out the Bonus in Excel.

How to calculate Bonus in Excel?

A financial incentive known as an earnings bonus is granted to a salesperson upon meeting or exceeding a pre-established goal. For instance, if he exceeds his daily sales goal of $10,000 to $12,000, he will obtain a bonus equal to a portion of the sales total. In a sales organization, it's critical because it.

  • Increases the motivation of employees
  • Increases the attainment of the goal
  • Promotes Healthy Competition
  • Makes workers more devoted to the company
  • Lowers employee turnover

This dataset contains the daily sales totals for each of the seven sales representatives on the list.

Have a $20,000 SALES hurdle and a 10% bonus percentage; this implies that they must exceed the $20,000 minimum sales target to receive a 10% bonus for the remaining amount.

Bonus Calculation Formula in Excel

How to Determine Bonus in an Excel Worksheet

Now, using various techniques, we will determine their sales bonus per those standards.

1. Applying Excel's IF Function to Bonus Calculation

Here, the IF function is the first technique we'll use. We may perform a logical test using this function to determine that sales representatives who make more than $20,000 will receive a 10% bonus, while those who make less than $20,000 will not receive any compensation. Simply take the actions listed below to accomplish this.


  • Choose cell D8 first, then type the formula below and hit ENTER.

Bonus Calculation Formula in Excel

Formula Explanation

We have implemented a logical test using the IF function, wherein any Sales Person will receive a 10% bonus on any remaining amount if his daily sales surpass or equal $20,000, which reduces his daily sales by $20,000. However, if he falls short of the $20,000 goal, he will not be qualified for any bonus.

  1. Next, we obtained the remaining column D results using the Fill Handle tool. That is visible in the image above.
  2. Likewise, it can be applied to erroneous values. We are merely providing it to improve your capacity for thought. To take a different perspective on something.
  3. Our earlier approach used logical tests to obtain bonuses in true and false values to indicate non-applicable values. But with this approach, we'll use the opposite logic. Here, some come with true values, and others who aren't eligible for a bonus do as well. Let's examine the process as it follows.


  • First, choose cell D8 like before, then type the formula underneath and hit Enter.

Bonus Calculation Formula in Excel

As can be seen, the outcomes obtained here are identical to those obtained when true values are used.

2. Using Excel's MAX Function to Perform Bonus Calculations

Using Excel's MAX function is another complex method for figuring out bonuses. To compute this way, adhere to our work steps.


  • Press ENTER after choosing cell D8 and pasting the formula in the appropriate place.

Bonus Calculation Formula in Excel

Formula Explanation:

In this case, the MAX function displays the greatest value between the two supplied numbers. First, the amount of Bonus, which comes before the comma, is zero in our formula, MAX((C8-$C$4)*$C$5,0). A positive bonus is achieved if the Daily Sales exceed the Sales Hurdle. In any other case, the Bonus is reduced. In other words, if a positive number exceeds zero, it will appear in the cell. While a negative number is smaller than zero, the latter appears in the cell because it is larger.

3. Applying Boolean Logic

Using the Boolean logic in the formula is an additional fascinating Excel computing bonus method. Follow the steps we've completed below.


  • First, choose cell D8, fill the Formula Bar with the following formula, and hit Enter.

Bonus Calculation Formula in Excel

Formula Explanation:

Following (C8-$C$4)*$C$5 Using a multiplication sign, we joined (C8>=$C$4) in this section of the formula. It is easy to understand that the bonus amount is calculated in the first section. However, are you aware of the purpose of the second part? Now, let's reveal the mystery. The purpose of the second section is to apply Boolean logic to this formula. It is known that in Boolean algebra,



Thus, the reasoning behind this is that the amount of sales made every day needs to be higher or greater than equals to the sales barrier. Any sales representative will receive a bonus multiplied by one if they meet the criteria and the outcome is true. In contrast, a person's negative bonus amount will be doubled by 0 if they don't match the requirements.

4. Putting the VLOOKUP Function into Practice

Using the VLOOKUP function is the most efficient and time-saving of all our techniques. We will now address our problem by utilizing this function.

We slightly altered our dataset for this strategy. Look into it first.

Bonus Calculation Formula in Excel

Our previous sales barrier was fixed at $20,000, plus a bonus of 10%. That said, we have now added a $15,000 additional limit with a 5% bonus. Additionally, we reduced Max's daily sales volume.

Proceed in the same manner as follows.


  • Press ENTER after choosing cell D11 at the beginning and entering the formula below.

Bonus Calculation Formula in Excel
  • Next, we obtained the remaining column D values by dragging the Fill Handle tool down.

5. Using VBA Code to Determine Bonuses in Excel

Using the VBA code is an additional solution to this issue. VBA application is always a funny way. Carefully follow the guidelines provided below.


  • Choose View Code with a right-click on the Excel Sheet name.
    Bonus Calculation Formula in Excel
  • The window for MS Visual Basic to Applications opens instantly. Right-click Sheet2 (VBA) and choose Insert > Module from the Toggle Folders menu.
    Bonus Calculation Formula in Excel
  • When the code module opens, paste the following code into it. After that, press F5 or click the Run button.


Bonus Calculation Formula in Excel
  • Go back to the worksheet after closing the code module. You'll be astounded to discover that, using our method 1, the cells in column D automatically fill up with the right answer. If you select cell D9, the Formula Bar will display the precise formula we utilized in our first method.
Bonus Calculation Formula in Excel

We employed the same formula from method 1 in our VBA code. The same outcomes were obtained when the IF function was used.

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