Most companies split a referral bonus into two parts, some at joining, the rest after the referred hire clears probation, to discourage referring candidates who don’t stick around. Here’s that split and the payment schedule worked out.
Paying the full referral bonus immediately at joining creates an incentive to refer anyone, regardless of fit, since the payout is guaranteed the moment the person starts. Splitting it, commonly half at joining and half after a probation period, ties part of the reward to the hire actually working out, which is why this structure is so common. The exact split percentage and probation length are policy choices though, not a statutory requirement, so check your own referral program’s terms.
No, when paid to an employee through payroll, it’s taxed as regular salary income subject to standard TDS, not treated as a separate income category.
Most policies simply forfeit the unpaid installment in that case, since the entire point of staggering the payout is to tie it to the hire completing probation. Check your specific referral policy for the exact forfeiture rule.
Yes, and it’s often one of the more efficient ones, compare it against other channels using our Sourcing Channel ROI Calculator.
Most referral programs allow company-wide referrals, not just within your own team, check your company’s specific policy for any role or level restrictions.
Referred candidates often accept offers at different rates than sourced ones, worth tracking separately in our Offer Acceptance Rate Calculator if you’re evaluating the program’s effectiveness.
Roll it into your total spend using our Recruitment Cost Calculator to see how referrals stack up against other line items.