You can run a separate bonus payroll to pay bonus for your employees. When running a bonus payroll, you can select either the Flat Supplemental Rate or the Wage Bracket Method for tax rate calculation on bonus amounts. You don't need to create pay schedules to run a bonus payroll.
For an overview of bonus pay, click here.
Here’s how to run a bonus payroll:
From the top menu, select Payroll >> Other Payroll >> Run Bonus Payroll.
Choose the payment method for your employees, the payday and whether or not to add employee deductions and contributions.
Select Flat Supplemental Rate or Based on W-4 Withholdings as tax withholding rate.
Select employees to run bonus payroll and click Save & Continue.
Select the tax rate calculation method for each employee:
To calculate tax at a Flat Supplemental rate, select Net Earnings under Other Earnings and enter the net amount in Earnings so that employees' gross pay will be automatically calculated using the gross-up calculation method and will be displayed under Gross Pay.
To calculate taxes based on W-4 withholdings using the Wage Bracket method, select Gross Earnings under Other Earnings and enter the amount. Enter other earnings, if any. Tax will be deducted from the gross pay.
5. Click +Add payroll notes to add notes for employees to view on their pay stub.
6. Review and make changes to reimbursements, if needed.
7. Review the Payroll summary and click Approve & Submit Payroll.
8. In the payroll confirmation page, click Approve.
To learn about including bonus pay in regular payroll, click here.