What is the difference between a discretionary and a nondiscretionary bonus?

A discretionary bonus is such that both the payment and the amount of the payment are determined at the sole discretion of the employer, not pursuant to any prior contract, agreement or promise which would cause the employee to expect such payments. Payment is made when the employer decides to issue the payment.

A nondiscretionary bonus is an extra wage paid for extra service performed by the employee and is usually based on a promise to pay if the services are performed. The extra services may be measured by an incentive plan, hours worked or other special performance. In this case, the bonus appears to be nondiscretionary and must be treated as part of the regular