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OT Dawn
Level 1

Lump sum payments subject to supplemental taxes

When you set up a payment such as Bonus or Vacation PayOut, how do you make sure that the supplemental tax is applied to these payments in Quickbooks?

3 Comments
john-pero
Community Champion

Lump sum payments subject to supplemental taxes

Run them manually through payroll as unscheduled, and then with the Bonus check, edit (override) any per pay period tax such as a local services tax to be zero and the statutory flat rate FWT of 22% (down from 25% in 2017) QuickBooks cannot for whatever reason calculate this 22% for you but i tis mandatory (unless you include bonus in a regular paycheck and allow the tax table to presume the increased pay is annualized).

1momof2
Level 1

Lump sum payments subject to supplemental taxes

HI,

If I am paying a bonus check and the employee wants it to go to his retirement (simple IRA) do I still withhold the 22% first? Or not since its deferred

Thanks

Charies_M
Moderator

Lump sum payments subject to supplemental taxes

Hello there, 1momof2.

 

Let me bring some clarity to your question about paying bonus check.

 

There's no need to withhold the 22% Federal Tax Rate to your employees Simple IRA since its differed. However, you'll have to consider other taxes that needs to be applied to bonuses such as Social Security, Medicare, and State taxes.

 

I've got you an article that you can refer to calculate the gross from the net: Net to gross formula.

 

If there's anything I can help you with handling bonus checks in QuickBooks, don't hesitate to get back to me as I'm here to help.

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