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.
Happy Holidays