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Old 12-22-2009, 10:15 AM
redbean redbean is offline
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Join Date: Jun 2004
Location: San Francisco
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Creating a bonus check

I needed to create an annual bonus check so I searched the forum and managed to piece together what to do. I thought I would write a bit more descriptive version of the process for both myself and others. I currently use Assisted Payroll so I ran this process by them and they said it was absolutely correct.

If you don't have Bonus accounts and items already set up:

Open the Chart of Accounts and create a new expense account called Bonus and make it a subaccount of your Payroll Expenses.

Open the Payroll Item List and create a new item called Bonus. Choose EZ setup and Compensation for the item. For the expense account use the Bonus account you just created (above).

Next open the Employee information and change the tab to Payroll and Compensation Info. Add the Bonus item to the list of Item Names under Earnings.

Now create the bonus check. In the check details I adjusted the pay period to start as well as end at the same time as the last pay period in the year. Enter the employee's new bonus item and choose gross amount you want in the Rate column. Both the Federal and State Withholding will calculate incorrectly so you need to manually change the amounts. For the Federal Withholding multiply the gross amount by 25% (as of Dec. 2009) and for the state amount in CA multiply the gross amount by 6.6%. You can search online for “supplemental wage tax rates” for your state’s rate.

Your bonus check is now ready to go out.

Thanks to all here who's posts alerted me to the fact that bonus taxes and dates needed to be manually adjusted to create the correct amount.
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Old 12-23-2009, 03:43 AM
Joe Williams Joe Williams is offline
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Join Date: Jan 2006
Location: Oklahoma
Posts: 8,954
Suggestion: If you set the pay period to Yearly for creating the Bonus Paycheck, then set it back to the normal Pay Period, then QB should calculate the tax rate on the amount of the bonus not the bonus * number of Pay Periods.
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