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Step 1: Determining the Rewards Budget Calculate your incentive program budget using the tool below.
How many people will participate in your incentive program?	_____________
How long will your program run?	_____________	3-24 months with 3 month increments.
Average participant annual income: $	_____________
Average participant income for program period: $	_____________	Average participant annual income ÷ 12, x number of months in program.
Select a payout rate (based on length of program - see tip): %	_____________	Choice of 3%, 4%, 5%, 6%, 7% and 8%.
Average participant reward earnings: $	_____________	Average participant income for program period x payout rate.
Percent of participants who will earn: $	_____________	80% or higher is typical, depending on the rules structure and objective.
Total participant rewards: $	_____________	Average reward earnings x number of participants x % expected to earn.

Step 2: Adding Communications and Administration Now that you've calculated a rewards budget, it's time to think about the other two main elements: communications and administration. A common incentive tip says 10% - 20% of your total incentive budget should be allocated to program communications. Administration usually accounts for up to 10% of the total program budget.
Program rewards: $	_____________	Total from previous calculation.
Program communications: $	_____________
Program administration: $	_____________
Total program cost: $	_____________

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