How do I Process Employee Bonus Checks

Overview:

Year-End is a common time for employers to give bonuses to their employees. Since bonus pay is treated as taxable income, bonus checks should be processed in the Payroll application.

NOTE: Although you can increase the employee's regular paycheck to include the bonus amount, most churches prefer to write a separate bonus check. The Financials software has a pre-defined Bonus compensation type you can use for this purpose.

For a visual tutorial, see the Process Employee Bonus Checks video.

Steps:

The following steps walk you through setting up a "Bonus" pay distribution for processing bonus checks. This is done if you want the expense for the bonus checks to be distributed to a different expense account than what is specified on the Salary/Hourly(Regular Wages) compensation distribution. Next, an "Even" $100 bonus check will be created for Liz Baker.

Set Up Compensation Information:

  1. From the Payroll menu, hover over Modify and then click Compensation Information.

  2. Click the Search button.

  3. Click the Edit Icon next to the Bonus compensation.

  4. Click the Add New Distribution icon-link.

  5. Type a description (this is what will print on the check stub) in the Name field.

  6. Click the Edit icon next to the Regular Pay pay type.

  7. Enter the FundDepartment, and Account number for the Regular Pay and then click the Update button.

  8. Repeat the process to assign the Social Security and Medicare accounts and then click the OK button when finished.

  9. Click the Update button to save the compensation.

Run Bonus Payroll Check:

  1. From the Payroll menu, hover over Manage and click Payroll Processing.

  2. Select to view All Employees and then click the Search button.

  3. Double-click an employee: in this case Liz Baker.

  4. Delete all Compensations, Deductions, and Non-Cash compensations. NOTE: Deleting information on the Payroll Processing page only changes the information for this payroll run and not the information stored on the employee's record.

  5. Click the Add New Compensation icon-link.

  6. Select the Bonus Compensation and the Bonus Distribution from the drop-down lists. (This is the distribution that you set up earlier in this tutorial.) NOTE: If you did not setup a Bonus pay compensation, you can use a "Salary/Hourly(Regular wages)" compensation.

  7. Select the # Pay/Year, Pay Type, and Classification fields as "1 for Bonus Pay", "Regular", and "Salaried". Enter the gross pay in the Pay Rate field and then click the Update button when finished.



  8. Review the bonus check information and then click the Update button to save your changes.

  9. The Bonus Check appears on the Payroll Processing page. Review the Compensation, Taxes, and Net amounts. Enter other employee bonus checks as appropriate. When you are finished, click the Process Payroll button and process the checks as you normally would.


For additional information, visit the Financials Online Help.


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