Everyone likes a bonus, right? Whether it’s for quarterly performance, cost-of-living, or to reward a good deed, bonuses show company appreciation and boost morale. But what is the best way to deliver that bonus?
With Gusto’s payroll software, it is always easy to give your employees a bonus at any point throughout the year. Many of our clients run monthly, quarterly, and yearly bonuses.
To award the bonus through Gusto, first log into the Gusto Admin account. Next, click Payroll and select Run Payroll. There are several Payroll options here, but you will want to select Run Bonus Payroll. Then, starting at the top, you will select the dates that you would like for this payroll run to correlate with and the date that you would like your employee to be paid for this bonus.
Next, you will see Deductions and Contributions. Make sure that you block all deductions and contributions, except 401(k). Taxes will still be included.
Continuing, choose your tax withholding rates. Click the link titled Edit Rates and select your normal payroll schedule, whether it be weekly, biweekly, monthly, etc. You need to be certain that you choose the correct tax option for this bonus. If you’re processing a bonus that is under $10,000, use the regular tax rate created for a typical payroll. If the bonus payment is going to be over $10,000, the supplemental rate should be utilized to be certain that it is taxed at the appropriate amount for a higher gross pay.
To proceed, you will then save and scroll down to the section with employees’ names. Enter the gross amount of the bonus for each employee that is receiving one. There is also an option to enter a net amount and gross up the total to account for the taxes. For example, if you would like your employee to take home a $500 bonus, you would enter $500 in the net pay and then Gusto will calculate the taxes based on that amount. Once you have entered all your bonus amounts for your employees, you will save and continue. From here, you will be directed to double check that all bonus amounts are correct and submit.
Working through the process to pay employees a well-deserved bonus doesn’t have to be difficult. As you can see, Gusto makes it quick and easy!
Of course, if you ever have a need to utilize the payroll team at SPB, we are only a phone call away!