Reminder about Payroll Bonuses
Posted by tim at December 18th, 2012
With the end of year approaching, please keep in mind that any payroll bonuses that employees receive are considered a taxable wage, just like any other wage. While it is common for employers to give Christmas bonuses in cash to their employees, we recommend issuing all bonuses on standard paychecks in your accounting software, so taxes are calculate correctly. It is possible to give cash bonuses correctly using QuickBooks (and other accounting software). Apply the following in QuickBooks to ensure that bonuses are issued correctly.
- Important! Record all bonus checks using a Paycheck form.
- If using cash, then write the paycheck in the Petty Cash bank account.
- Use Non-Scheduled Payroll feature to ensure that your payroll cycles don’t get messed up.
- Use Enter Net/Calculate Gross feature if you want to give your employee an even net bonus.
- Federal Withholding can be overridden if QuickBooks calculates is too high (a common problem for large year-end bonuses).
Please call CleanBooks anytime at (888) 330-5313 to speak with a payroll professional.
Category: General News