The bonus system applies to a broad range of workers, but not to all. Regular employees earn a monthly wage, which is usually paid as a fixed salary. It is based on their general classification and years of service. The monthly wage is intended to cover living expenses. In addition, employees receive substantial bonuses twice a year, in June and December. Each bonus is normally equal to one to three months’ salary. Although the term “bonus” suggests a special reward for good work, the semi-annual bonus has become an entitlement and an integral part of the wage system. It is also a form of profit-sharing for companies. The size of the bonus depends on the company’s profitability, and is subject to collective bargaining by the company’s union. However, even some companies facing bankruptcy continue to pay reduced semi-annual bonuses. Since employers and employees consider the bonus to be a part of the wage package, it acts as a form of forced savings which the company withholds from the monthly salary. Japanese workers know that twice a year they will receive a bonus payment, which they can use for major purchases and for savings. Because it is both predictable and substantial, the bonus system encourages saving and rational planning of expenditures.