Learn how to pay employees bonus paychecks in Online Payroll.

A bonus is compensation over and above the amount of pay specified as a base salary or hourly rate. We'll show you how to create a bonus on a regular paycheck. And on a separate paycheck.

Add a bonus on a regular paycheck

Before you can give an employee their first bonus on a paycheck, you need to add the Bonus pay type to the employee's profile. If the employee already received the bonus pay (such as in cash), record the payment as a manual check. And not as a direct deposit check.

Intuit Online Payroll and Intuit Online Full Service Payroll

Add the Bonus pay type to an employee's profile.

  1. Select the Employees tab.
  2. Select the employee's name.
  3. In the Pay section, select Edit.
  4. In Show all pay types section, select Bonus. Then select OK.

Add a Bonus on a paycheck.

  1. Select the Payday tab.
  2. Select the employee. Then enter the amount in the Bonus field.
  3. Create and approve the payroll.

QuickBooks Online Payroll and QuickBooks Online Full Service Payroll

Add the bonus pay type to an employee's profile.

  1. From the left menu, select Workers, then Employee.

  2. Select the employee's name.
  3. In the Employee details section, select the pencil icon next to Pay.
  4. Select Add additional pay types. Then select Bonus.
  5. Select Done.

Add a bonus on a paycheck

  1. From the left menu, select Workers, then Employee.

  2. Select Run Payroll.

  3. Select the employee. Then enter the amount in the Bonus field.
  4. Preview and submit payroll.

Reasons for creating a separate bonus paycheck

Here are some of the common reasons for creating a separate bonus check:

  • Control the tax treatment of a bonus. Or the withholding of retirement account deductions.
  • Turn off direct deposit for the bonus check.
  • You are paying the bonus off-cycle. Not on a regularly scheduled payday. (You can use a bonus check to pay back wages or underpaid wages.)
  • Your employee has accumulated $1,000,000 or more in supplemental wages and you are required to withhold federal taxes at 37%.
  • Deliver the bonus check as a special event to the employee.
Note For separate bonus checks, you cannot use the direct deposit to 2 accounts pay method.

Special settings for separate bonus paychecks

Use supplemental tax rates

Since a bonus is considered supplemental pay, it is subject to the supplemental tax rates. To apply the special federal supplemental tax rate to a bonus, two conditions must be met:

  • Pay the bonus separately from a regular payroll check.
  • Withhold at regular withholding rates on the employee's regular salary.

The federal supplemental tax rate is currently a flat 22%. This special rate may not be the best option to your employees if it is higher than their regular rate. If you want to apply the supplemental tax rate to some employees only, do separate bonus runs. If your state also has a supplemental tax rate, Online Payroll applies the state rate when you select the supplemental rates.

Use net-to-gross calculation

There are several reasons to create a separate bonus check with a specified net pay:

  • Employees will receive a certain amount of net pay. For example, you want to give your employee a net check of $100.
  • You pay the employee portion of taxes for the bonus check. When an employer pays an employee's taxes, the amount paid is an employer-provided benefit. The taxes paid on the employer's behalf are also taxable income to the employee.
  • You gave your employee a cash award. And need to calculate the taxes and report the amounts through payroll.
Note
  • You cannot use net-to-gross together with any deductions (retirement, HSA, or garnishments).
  • If the employee has any additional withholding deducted from each paycheck, it will be subtracted from the net pay during the net-to-gross calculation. To ensure that the net pay on the bonus check is the amount you expect, add the additional withholding to the amount in the Net Bonus field.

Include retirement account deductions, contributions, and garnishment

You have the option to include the employee's deduction, contribution, and garnishment in the bonus check. But you can not do this along with a net-to-gross calculation.

To create a separate bonus paycheck

Here's how to create a separate bonus paycheck.

Intuit Online Payroll and Intuit Online Payroll for Accountants

  1. Select the Payday tab.
  2. Under Check Type, select Bonus Checks.
  3. Select Go.
  4. Select the applicable settings for the bonus paycheck.
  5. Select the employee. And enter the amount.
  6. Create and approve the paycheck.
  7. If you select net-to-gross, the pay stub will list Employee Taxes Paid by Employer under the pay section.

Intuit Online Full Service Payroll

  1. Select Payday. Then select Bonus.
  2. Select Pay Schedule. Then select Pay method.
  3. Select the applicable settings for the bonus check. Then select Next.
  4. Select the employee. And enter the amount.
  5. Create and submit paycheck.
  6. If pay method was paper check, Print check.

QuickBooks Online Payroll and Quickbooks Online Full Service Payroll

  1. From the left menu, select Workers, then Employee.

  2. Select Run payroll. Then select Bonus only.
  3. Select the applicable settings for the bonus paycheck. Then select Continue.
  4. Select the employee. Then enter the Bonus amount.
  5. Select edit (pencil) icon beside "Payroll options".
  6. Select the payroll options you want . Then select Apply.
  7. Select preview and submit payroll.
  8. If you selected As net pay, the pay stub includes Employee Taxes Paid by Employer in the pay section.