Payroll Bonus Paycheck
Table of Contents
Click here to learn about paying commission in AccountEdge.
The instructions below are for creating a bonus check that is separate from a regular payroll check and is taxed at a special rate. Alternatively, if you want to include the bonus with the regular paycheck you can process payroll as normal but in the Select & Edit Paychecks window manually edit the paycheck to add the bonus amount in.
Tax Rates on Bonus/Commission Checks
Bonus/Commission checks will be taxed differently than a regular paycheck. As of 2018 the US federal government recommends the supplemental tax rate of 22% will be used when calculating Federal Income Tax. If an employees wages exceeds $1 million, everything above $1 million will be taxed at 39.6%. For Canadian payroll bonuses and commissions are taxed at special rates which need to be manually calculated and entered.
Create a Bonus Wage Category
This step is optional. You can also use your regular wage category. If you create a separate Bonus Wage Category it will allow you to track bonus pay separately from regular pay. If you are setting up a Bonus Wage category for an hourly timesheet employee the Type of Wage will need to be set to Hourly. If you are setting up a Bonus Wage Category for a non-timesheet or salary employee the Type of Wage can be either Hourly or Salary.
- Go to your top menu bar and select Lists > Payroll Categories.
- Select the Wages tab at the top.
- Check to see if you already have a Bonus Wage Category setup
- If you need to set up a Bonus Wage Category click the New button at the bottom of the Payroll Category List.
- Type of Wages should be set to Hourly for hourly timesheet employees. Type of Wages can be set to either Hourly or Salary for hourly non-timesheet or salary employees.
- At the bottom of this window click the Employee button and check off all employees that this wage applies to.
- Click the OK button to close this window.
Process Bonus Check for Hourly with Timesheets:
In order for your timesheet employee to show up in the list of employees to be paid they must have hours on a timesheet.
- Create a timesheet with 1 hour or add 1 hour into an old used time sheet and code it to the Bonus Wage.
- Select Process Payroll in the Payroll Command Center.
- Select Bonus/Commission in the Process All Employees paid dropdown.
- Enter the appropriate payment date.
- Select the correct pay period.
- Click Next.
- Click the arrow to the left of the employees' names to edit the paycheck, adding the Bonus / Commission amount, and clearing or adjusting the hour entered on the timesheet.
- Click OK.
- When all edits are complete, continue with payroll.
Process Bonus Check for Hourly (without Timesheets) and Salary:
- Select Process Payroll in the Payroll Command Center.
- Select Bonus/Commission in the Process All Employees paid dropdown.
- Enter the appropriate payment date.
- Select the correct pay period (it must include the 1 hour you put on a timesheet).
- Click Next
- Click the arrow to the left of the employees' names to edit the paycheck, adding the Bonus / Commission amount.
- Click OK.
- When all edits are complete, continue with payroll.