I was recently reviewing a client's employee handbook when I came across a new benefit they were proposing which I had not seen before: a “Vacation Bonus.” In this case, the concept was simple. If an employee takes a full week of vacation, the company gives them a $500 stipend to help them enjoy it.

My first reaction? What a beautiful idea! Imagine an employee on vacation with their family, looking at an expensive dinner menu and saying, “Hey everyone—tonight’s dinner is on my boss!” Or perhaps: “Today’s adventure park tickets were courtesy of my company!” Or maybe the employee uses the money for a staycation, a spa day, a round of golf, a special dinner, or for items to redecorate their home.

Whatever the choice, the message from the employer is pretty wonderful: We want you to take a break. And we want you to enjoy it.

Why Pay People to Take Vacation?

Having vacation time and actually using it are two very different things. Recent research backs this up. A 2025 meta-analysis of vacation research found that vacations are associated with improvements in employee well-being, although the benefits can fade after employees return to demanding work environments. And according to the Society for Human Resource Management (SHRM), roughly half of U.S. workers surveyed in 2024 expected to leave some vacation time unused. Among the reasons? The expense of taking a vacation ranked first. That makes a vacation bonus particularly interesting. It doesn't just give employees time away from work—it gives them a little extra financial incentive to actually use that time.

And employers may get something in return:

• Less burnout and stress
• Better morale and employee engagement
• A stronger culture of work-life balance
• A creative recruitment and retention tool
• Employees who return to work rested and recharged
• And, perhaps most importantly, the goodwill that comes from knowing your employer genuinely wants you to have a life outside the office.

There is another benefit that may be even more important in today's workplace: permission to disconnect. SHRM has reported that many employees continue to work during their vacations, checking email and taking work calls even when they are technically “off.” A vacation bonus could send a pretty clear cultural message: Don't just take the PTO. Take the break.

The Greek Vacation Bonus

Interestingly, Greece has long taken a different approach to vacation. Greek employees are entitled to paid annual leave plus a statutory holiday allowance—essentially an additional payment connected to annual vacation. The allowance is generally capped at half a monthly salary for salaried employees. So perhaps the idea isn't quite as crazy as it sounds back here on U.S. soil. Of course, a $500 vacation bonus isn't practical for every employer. Some businesses simply cannot afford it. And employers may reasonably look at today's flexible workplace and say, “Our employees already work from home two or three days a week. Isn't that flexibility itself a benefit?” Fair point.

But for employers looking for a relatively simple, memorable way to demonstrate that they value their employees' well-being, the vacation bonus is certainly worth considering. Sometimes the best employee benefit isn't another perk, another app, or another piece of branded merchandise. Sometimes it is simply telling your employees, “Go. Take the week. Have some fun. And dinner's on us.”

Reach out to an RKW attorney if you have questions about your workplace policies or are interested in discussing similar employee perks!