How to provide a bonus payment to your staff
One time or occasional bonus payments are easy to add as part of your payroll runs.
Bonus as part of a regular pay run
To pay a bonus to a staff member as part of your regular pay runs, follow these steps:
A. Login to your account and click on Run Payroll to start your pay run.
B. Choose the payment date, payroll type, and pay cycle types.
C. Click on Submit.
D. Click on “+” to add additional earnings.
E. Choose Bonus as earnings code. Then entering the rate, hour, and total earnings amount.
F. Click on Add and Submit.
G. Select the checkbox to choose specific employees whose work hours you want to approve.
H. Click on Approve.
I. Click on Next to continue payrun.
J. Choose the payment method, employee payments date, payment type, and confirm the payment information.
K. Click on Finish this payrun.
L. Confirm the payment details and click Yes, authorize.
M. Review the payment summary and finish running payroll.
The bonus amount will show as part of the employee's regular pay run and will be listed as a separate line item.
Bonus as a separate (special) pay run
Submitting a "bonus-only" run is NOT recommended. Consider paying this as part of a regular pay run to ensure your tax calculations are in accordance with CRA tax law. If you must pay out a bonus as a separate pay run, the employee vacation calculations must be set to accrue or off. If they are set to release each pay, your tax calculations will be incorrect.
To change employee setting follow these steps:
A. Click on Employees.
B. Click the Ellipses.
C. Select Profile.
D. Click on Payroll.
E. Select Vacation.
F. Enter the Vacation Pay Owing amount.
G. Select Off or Accrue.
H. Click on Save.
I. Click on Run Payroll.
J. Select the Payment date.
K. Choose the Payroll Type, Pay Cycle, and Dates.
L. Click on Submit.
M. Click + to add additional earnings.
N. Choose Bonus.
O. Enter the Rate, Hour, and Total Earnings.
P. Click on Add and Submit to complete your payroll as normal.
Creating a custom pay rule for bonuses
If you'd like to use your own custom pay rule for bonus payments, you'll need to make sure your rule uses the occasional earnings tax method. You'll want to use your own custom code if you want to customize the term "bonus" on employee pay slips.
Here's how:
A. Click on Settings.
B. Click on Pay Rules.
C. Click on Earnings.
D. Click on Add New Rule.
E. Set up the rule through entering the employee’s name. You can leave GL code blank.
F. Continue set up the rule as follows:
- Enabled is checked
- T4 Box: enter any special T4 box numbers (do not include box 14)
- Provincial Box: enter any special RL-1 box letters (do not include box A)
- CPP is checked
- EI is checked
- Federal Tax is checked
- Provincial Tax is checked
- Vacationable is checked (depending on your province, most will set this as ON)
- Occasional Earnings is checked
G. Perform your pay runs as indicated in the sections for Bonus as a part of regular run or special run, but use your new earnings code when adding the bonus. Click on Save.
Note: The CRA and your local provincial employment standards will dictate how certain bonuses will be taxed. You should check and verify your pay rule against these guidelines before performing your pay run.