Employee Referral Program Policy Template

Great people know great people — and often, the best hires come through personal networks. An employee referral program makes it easy for team members to recommend talented people for open roles, while helping the company grow with trusted, values-aligned candidates.

When structured thoughtfully, a referral program can speed up hiring, lower recruitment costs, and strengthen team culture. It also gives employees the chance to be recognized and rewarded for helping build a great workplace.

This policy outlines how the referral process works, who is eligible for rewards, and what employees can expect when they refer someone to join the team.

What the Referral Policy Should Include

A successful employee referral policy should include:

• Purpose and scope: Why referrals matter and who the program applies to
• Eligibility: Which employees can participate and who can be referred
• How to submit a referral: Step-by-step process, forms, or platforms used
• Reward structure: What incentives are offered, when they’re paid out, and any conditions
• Timing and payout rules: Probationary periods, bonus amounts, and payment timelines
• Program exclusions: Cases where bonuses may not apply (e.g., prior applicants)
• Tax or payroll considerations: Whether bonuses are taxed or added to paychecks
• Contact for questions: Where employees can go for support or clarification

Purpose of the Referral Program Policy

This policy exists to make it easy for employees to refer qualified candidates and to recognize those who help us grow. It’s designed to:

• Encourage referrals for high-quality, culture-aligned candidates
• Streamline the referral process so employees know exactly what to do
• Ensure fairness and transparency in how bonuses are earned and awarded
• Support faster, more efficient hiring through trusted networks

Sample Employee Referral Program Policy

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Effective Date: [Insert Date]
Policy Owner: Talent Acquisition / People Team
Last Reviewed: [Insert Date]

1. Policy Overview

Our employee referral program is designed to encourage team members to help identify and attract top talent to [Company Name]. If you refer someone who is hired and successfully completes the onboarding period, you may be eligible for a referral bonus as a thank-you for helping grow our team.

This program applies to all regular, full-time and part-time employees, unless otherwise noted below.

2. Who You Can Refer

Employees can refer:

• Friends, former coworkers, classmates, or personal connections
• Candidates for any open position listed on our careers page
• Individuals not currently employed by or actively interviewing with [Company Name]

Referred candidates must be new to our system. If they have already applied or been in contact with our recruiting team within the last 6–12 months, they are not eligible for referral rewards.

3. Who Is Eligible to Receive a Bonus

Referral bonuses are available to:

• Full-time and part-time employees in good standing
• Employees who are not part of the hiring decision for the role they’re referring into
• Employees who are not recruiters or members of the Talent Acquisition team

Managers may refer candidates for roles outside of their team but will not receive a referral bonus if they’re involved in the hiring decision.

Contractors, interns, and temporary workers are encouraged to refer candidates but are not eligible for financial incentives unless specifically authorized.

4. How to Submit a Referral

To refer a candidate:

1. Visit [Insert referral platform or internal system]
2. Submit your referral using the designated form or link
3. Include the candidate’s resume or LinkedIn profile and relevant background information
4. Our Talent team will confirm receipt and keep you updated as the candidate progresses

You must submit the referral before the candidate applies or reaches out independently.

5. Referral Bonus Amounts

Bonuses may vary depending on the level of the role. As of the effective date:

• Entry-level and mid-level roles: $1,000
• Senior-level roles (Director and above): $2,500
• Hard-to-fill or priority roles: Up to $3,000 (as designated on job postings)

All bonus amounts are gross, meaning they are subject to applicable taxes and withholdings.

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6. When Bonuses Are Paid

Bonuses are paid after:

• The referred employee is hired and completes 90 days of continuous employment
• The referrer is still actively employed at the company at the time of payout

Payments are typically processed in the payroll cycle following the 90-day milestone.

7. Exclusions and Limitations

Referral bonuses will not be awarded for:

• Referrals of current employees, contractors, interns, or former employees reapplying within one year
• Self-referrals or candidates submitted after they’ve already applied
• Candidates hired into temporary roles unless otherwise specified
• Roles for which the referrer is responsible for hiring, managing, or supervising

Additionally, referral bonus amounts may be adjusted or capped during hiring freezes or budget constraints.

8. Taxes and Payroll

Referral bonuses are treated as taxable income and will be included in your paycheck. Applicable deductions and withholdings will apply in accordance with federal, state, and local laws.

9. Program Changes and Contact

This program may be updated at any time based on business needs. Bonus amounts, eligibility rules, or submission processes may be modified with or without notice. Any updates will be communicated via email or the People Team portal.

For questions about this program, contact [Insert contact name or HR alias].

Frequently Asked Questions

1. Can I refer someone I’ve worked with but don’t know personally?
Yes — as long as you believe they’re a strong candidate for the role and can vouch for their abilities, that’s a valid referral.

2. What if two employees refer the same candidate?
The bonus will go to the employee whose referral was submitted first, as determined by timestamp.

3. Can I refer someone who lives in a different country or state?
Yes — as long as the role is open to remote or international applicants and the candidate meets the qualifications.

4. How do I know if a role is eligible for referral bonuses?
All roles listed on our [Careers Page or Internal Job Board] are eligible unless otherwise noted.

5. Can I refer someone to a department I work in?
Yes, but if you're involved in interviewing or making the hiring decision, you may not be eligible for the referral bonus. When in doubt, check with HR.

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