ACT with confidence!
Tis the Season for Giving Bonuses!
Make sure ALL bonuses paid to your employees are processed through payroll and taxes withheld.
If you want to give a net bonus of $100 (example), the $100 must be grossed up for taxes.
If giving gift cards this season, you must add the face amount to the employee’s regular pay run, apply taxes, and deduct the same amount given.
When paying with a separate check (not included in regular wages), a 22% federal withholding is required on supplemental payments (bonuses).
When a bonus of over $1 million is given, the tax is 37%.
For rules or questions regarding bonus giving, contact ACT Business Outsourcing Services or your payroll provider.