Learn how to give your employees a bonus check using QuickBooks Payroll.
Bonuses are a great way to recognize your employees for a job well done. But there’s also some things to consider when it comes to paying them. We’ll show you how to pay bonuses in QuickBooks.
|Note: Not sure which payroll service you have? Here's how to find your payroll service.
Step 1: Add the bonus pay item to your employees (if you haven’t already)
Follow the steps below for your payroll product.
Step 2: Pay out the bonuses
You can pay the bonuses on separate paychecks (or a bonus-only payroll), or add the bonuses to your employees’ regular paychecks.
Option 1: Run a bonus-only payroll
- You can use the federal and state bonus supplemental tax rates (recommended).
- You can gross-up the bonus if needed. For example: if you want your employee to receive $1000 after taxes, you can enter this as a net pay amount. You’ll pay the employee portion of taxes.
- If you use QuickBooks Online Payroll:
- Your employees won’t get an email notification about their bonus from QuickBooks Workforce.
- The bonus will only go to one direct deposit bank account. If your employee has 2 accounts, the bonus paycheck will go into their secondary account.
- If you enter the bonus amount as net pay you can't deduct retirement, HSA, or garnishments.
Option 2: Add the bonuses to regular paychecks
- The bonus is taxed the same as the employee’s regular pay.
- Federal income tax may calculate at a higher tax rate. See Section 7 of Publication 15 for more info.
- Deductions set as percentages will come out of the bonus.