Bank of Ireland has reached a proposed pay deal with the Financial Services Union (FSU) which recommends salary increases of 4% linked to performance.
The deal is subject to acceptance through staff ballot.
Bank of Ireland has also announced a new health insurance contribution of up to €1,400 per year which will be introduced in the second half of 2024 for Republic of Ireland staff.
A new health benefit is also being designed for staff based in Northern Ireland, which will also be introduced at the same time.
In addition, around 8,000 Bank of Ireland staff will receive a personal benefit payment of €200 or £175 next month.
In February, Bank of Ireland announced the return of staff bonuses from next year.
The performance-related Profit Share Scheme will be based on both the financial performance of the company and individual performance during 2023.
The bonuses will be capped at €20,000, with a maximum award of 10% of an employee's salary.
"It is important to reward colleagues for good performance, and it is critical that this is linked to positive outcomes for our stakeholders, especially customers," said Matt Elliott, Chief People Officer, Bank of Ireland.
The FSU said it will be holding member meetings to explain the deal and said the pay ballot will open on 22 November.
"The FSU campaigned for the return of variable pay and benefits so that ordinary bank employees could be rewarded on an equal basis as others working in the wider financial services sector," said John O'Connell, General Secretary of the FSU.
"The agreement between the FSU and BOI on health insurance is a step in the right direction to help make the retail banking sector a career choice for new graduates," Mr O'Connell said.
