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Bonus Checks

Scenario: Client emails or calls to have bonus checks setup for a single employee or all employees

Questions for client:

  1. Will the bonus run with a regular payroll or do you want it on a specific date
  2. Will the bonus check be direct deposit or will you be doing live checks
  3. Do you want the bonus check to be taxed differently than the employee’s regular check.
    1. FICA only?
    2. FICA and a flat withholding rate (22%)
    3. Gross up – client pays the taxes – confirm which taxes the client wants to pay: FICA only or FICA and WH

Navigate to Earnings at the client level

  • Setup the Bonus Earning (if not already setup)

If the client wants the bonus check to be taxed differently from the regular check, navigate to additional checks.

Here is the University article explaining how to setup an additional check type https://learning.myisolved.com/library/articles/701

The best practice for paying employees a bonus, is to use an additional check either in a special payroll or a regular payroll. This way the employee’s pay won’t incur additional withholding. Adding a bonus to a regular check can cause the employee’s withholding to be overstated.

If the employer is doing live checks, you can have the additional check automatically post as a manual. This is an option on the additional check screen. The bonus checks will be grossed up for taxes. Only the taxes will appear on the summary for impounding from the client.