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.
- Click the Payroll section and select Run payroll.
- Under the "Other payroll options" section, select the Bonus Payroll tile.
- 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.
- Select the check date.
- 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.
- 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.
- Review the tax withholding rates.
- If you want to make a change, click Edit rates under the Tax withholding rates section.
- Next to the employee, click Enter Payment.
- 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.
- Adjust the payment method to check or direct deposit if needed.
- Click Save & Continue.
- Review the wages and taxes Gusto will be debiting.
- If you need to make adjustments, click Go Back.
- If you are ready to process, click Submit Payroll.
- If you're paying your employee via check, print the check and give it to your employee.
- 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.