In all, more than 1 million Walmart employees will benefit from the bonuses and wage changes.
The move also comes amid a 17-year low for the USA unemployment rate, which has intensified competition for good workers.
"We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders", Walmart president and CEO Doug McMillon said in a statement. "It's our people who make the difference and we appreciate how they work hard to make every day easier for busy families". "Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S".
The move follows last month's USA tax code overhaul that cut the corporate rate from 35% to a flat 21%.
Wal-Mart employs about 2.2 million people globally, with more than 1.5 million in the USA and had total global revenue of almost $500 billion past year.
Economists have argued that one-time bonuses, while significant for workers living paycheck-to-paycheck, are not as meaningful as permanent wage increases. The payout will cost Walmart a total of $400 million dollars.
"Wal-Mart would have had to go to at least $11 in many markets in order to retain reliable employees", said University of MI business professor Erik Gordon.
Taking effect next month, the wage hike will be about $300 million incremental to what was already included in next fiscal year's plan. The amount of the bonus will be based on length of service. Employees who have worked for at least 20 years will get the full $1,000.
According to The New York Times, the company will "expand its maternity and parental leave policies to give full-time hourly employees 10 weeks of maternity leave and six weeks of paid parental leave". Full-time hourly workers will also receive 10 weeks of paid maternity leave and six weeks of paid parental leave.
Parental leave has been another area in which retailers including Target and Ikea have been trying to offer better benefits. Job postings at an Amazon warehouse in OH, for example, offer a starting pay of $14.50 an hour. Walmart itself announced similar $1 minimum wage increases in 2015 and 2016.
Its rival Target had raised its minimum hourly wage to $11 in October, and said it would raise wages to $15 by the end of 2020.
Walmart said hourly employees at its websites, distribution centers and its Bentonville, Arkansas, headquarters, will benefit from the wage increase. While many traditional retailers have been struggling to keep up with online behemoth Amazon, Walmart has fared better.