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Planning for Year-End Bonuses - Ahola

Written by aholaadmin | Dec 5, 2019 2:52:23 PM

If you’d like to present your employees with a physical check, Direct Deposits can be shut off for the Bonus Run…

As the end of the year rapidly approaches, it is common for employers to process year-end Bonuses in addition to their regular payroll. Here are a few things to consider before processing a Bonus Run.

Bonus vs. Regular Payroll

Will you be processing a Bonus separate from your regular payroll? Notify your Payroll Processor if you will be processing a Bonus separate from your regularly scheduled payroll. A Special Run will need to be added to your Payroll Calendar.

Physical Check

How would you like to present the Bonus to your employees? If you’d like to present your employees with a physical check, Direct Deposits can be shut off for the Bonus Run.

Withholding

Be sure to specify your preferences for Retirement Plan withholding. Should Retirement Plan Deferrals (401(k), Simple IRA, etc.) be calculated and withheld from Bonus Payments?

Gross or Net

When supplying Bonus Figures to Ahola, be sure to specify amounts. Are you submitting Gross Figures (before taxes) or Net Figures (the amount you wish employees to “take home”).

Surprise Bonus

When will you process your Bonus? Processing a Bonus Run right after your regularly scheduled payroll is a perfect time to ensure Bonus Figures aren’t revealed early on the Employee Pay Stub or through Employee Self-Service.

Tax Planning

How will you tax your Bonus Run?

  • Regular Tables
  • Monthly Tables
  • Quarterly Tables
  • Flat Rates
  • Supplemental Tax Rates
  • The Supplemental Tax Rate is 22% for Federal and 3.5% for the State of Ohio.

Have questions on Bonus run best practices? Contact us today.

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