Bonus payrolls

You might need to pay a bonus outside of your regular pay schedule for a variety of reasons, and to do that you can run a bonus payroll. Bonus payrolls default to the supplemental 22% withholding rate per the IRS, but this can be changed. There is no extra fee to run a bonus payroll. 

If you have more than one employee, you can use our search, sort, filter, and bulk edit tools to make administrating payroll(s) easier.

Run a bonus payroll

Follow the steps below to run a bonus payroll. If at any point you need to exit to payroll flow, click Save changes for later at the bottom of the page to save this payroll as a draft. The steps to access this draft are the same below.

  1. Click the Payroll section and select Run payroll.
  2. Under the "Other payroll options" section, select the Bonus Payroll tile.
  3. Enter a work period.
    • The timeframe in which the employee worked to earn this payment. 
    • If you enter a timeframe in which an employee has requested time off, the bonus payroll will include and pay out the time off.
  4. Select the check date.
  5. If you have multiple bank accounts set up, select which bank account you would like to process payroll from.
    • If you don't see this option, head to this article to learn more.
  6. Select if you want deductions and contributions to be included. 
    • Block all deductions and contributions:
      • We won't make any benefit deductions or contributions. 
        • Important: We're unable to turn off 401(k) deductions and contributions due to the requirements of most plans.
    • Make all the regular payroll deductions and contributions:
      • We'll make all your normal benefit deductions and contributions.
      • If your benefits are managed by Gusto, your standard benefit will not automatically be applied unless you choose them to be included.
  7. Review the tax withholding rates.
    • If you want to make a change, click Edit rates under the Tax withholding rates section.
  8. Next to the employee, click Enter Payment.
  9. Enter the bonus amount as either +Gross Earnings or +Net Earnings. 
    • Gross Earnings: The amount of money your employees receive before any taxes and deductions are taken out. 
    • Net Earnings: The amount of money your employees take home after all deductions have been taken out. This is the money they have in their pocket on payday.
  10. Adjust the payment method to check or direct deposit if needed.
  11. Click Save & Continue.
  12. Review the wages and taxes Gusto will be debiting. 
    • If you need to make adjustments, click Go Back.
    • If everything looks good, click Submit Payroll.
  13. If you're paying your employee via check, print the check and give it to your employee.
  14. You'll receive a confirmation email letting you know that your bonus payroll has processed.

Note: If your employee has an active garnishment, you may need to check with the garnishment authority to see if there are specific requirements for garnishing the bonus payment.