How to provide a bonus or commission payment to your staff
One time or occasional bonus payments are easy to add as part of your payroll runs. Determine if you want the bonus payment to be part of a regular payrun or if you want it to be a separate (special) run.
Bonus / Commission as part of a regular payrun
To pay a bonus or commission to a staff member as part of your regular payruns, follow these steps:
- Login to your account (you'll need to login using payroll manager permissions or higher). Start your payrun as usual.
- On the SALARIED or TIMESHEETS step (depending on the type of employee you'll be adding the bonus for), click the 'add other' icon near their name. Tip: If you click 'add other' on a line item that hasn't been approved, the entire line item will change to just a bonus payment. If you want to keep their regular earnings, approve the line first, then click 'add other'.
- On the additional earnings popup, select BONUS as the earnings code (or COMMISSION if appropriate) and fill in the amount you wish to provide. The amount you enter will be the gross bonus (before deductions/taxes).
Click the ADD button, and then click SUBMIT to go back to the payrun.
- Continue your payrun as usual. The bonus amount will show as part of the employee's regular payrun and will be listed as a separate line item.
Bonus / Commission as a separate (special) payrun
Please note: Submitting a "bonus-only" run is NOT recommended - please ensure there are regular earnings for each employee receiving a bonus for that specific pay run.
Using custom pay rules 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 methodology. You'll want to use your own custom code if you want to customize the term "bonus" on employee pay slips. Here's how:
- Add your own custom earnings code (review Custom Pay Rules to learn more)
- Set up the rule as follows: CPP is ON, EI is ON, Federal Tax is ON, Provincial Tax is ON, Vacationable is ON (depending on your province, most will set this ON), Occasional Earnings is ON
- Perform your payruns as indicated above, but use your new earnings code when adding the bonus.
Note: The CRA and your local provincial employment standards will dictate how bonuses will be taxed. You should check and verify your pay rule against these guidelines before performing your payrun.
Post is closed for comments.