How to process bonus check



Solution ID = KB-341

Goal : How to process bonus check

Version = All Version

Module : SLACCT

Database : Progress, SQL

Fix

How to process bonus check
There are basically two ways to process a bonus check, either as Supplemental Earnings or through a Deductions and Earnings code "Earnings added to pay".

Supplemental Earnings:
The advantage of using Supplemental Earnings for bonus checks is the ability to set a certain percentage to be withheld for Federal and State taxes. This percentage is entered on the Federal and State Tax Code "Exempt" screen. On the Payroll Processing screen, enter the bonus amount in the Suppl Earn field and compute.

Deduction and Earning Code "Earnings added to pay":
The other option is to set up a Deduction and Earning Code for type "Earning added to pay". One important note when creating this code, the 401(k) field on this code does not mean this code is subject to 401(k) or not. Only true 401(k) deduction codes should have this field checked. On the Payroll Processing Deductions and Earnings screen, enter the D&E Code in the Temp D/E Codes and the dollar amount of bonus and compute.

Other tips when creating bonus checks:

1. When entering bonus checks for salary employees, uncheck the Pay Salary box on the Payroll Processing screen in Progress versions or uncheck the Pay Salary box on Payroll for Pay Period form in SQL versions.

2. If you do not want any of the employees Permanent D&E deductions included, clear the Perm D/E Freqs field on the Payroll Processing screen.

3. If you need 401(k) to be calculated on bonus, but none of the other Permanent D&E codes, then you will need to define the 401(k) code with a unique frequency. For instance, if you process both weekly (W) and bi-weekly (B) payrolls, you may wish to set the 401(k) code frequency to monthly (M). This allows you to enter an M in the Perm D/E Freqs field on Payroll Processing screen for bonus and only the 401(k) deduction will be considered. Normal payrolls after this change would be generated for types WM (Weekly) or BM (Bi-Weekly).

4. You can either generate payroll for range of employees being paid a bonus and update the Payroll Processing screen as needed, or you can Edit - Add on the Payroll Processing for each employee receiving a bonus and enter the information required.