Year-end bonuses are a great way to reward your team for their part in your company's success. But there are two things you'll need to keep in mind to ensure your bonus pay run goes smoothly.
Direct deposit limits
Bonus pay runs sometimes exceed the pre-approved direct deposit limit for your company. In these cases, we may require that you wire the funds to pay your employees this bonus by the date of your choice. If you are unsure of your limit, email us at email@example.com. We'll help you get this set up so you can pay your bonuses on time.
IRS Next-Day Rules
Keep in mind that bonus runs resulting in $100,000 or more in federal tax liability qualify for the IRS Next-Day Rules. In this event, the bonus payroll must be run at least five (5) business days before the check date to ensure funds are available on time.
For example, for a bonus check date of December 31st, you must complete the run no later than December 23rd under the Next-Day Rule. This allows time to properly draft the funds and remit the tax payment. If you cannot provide enough time for OnPay to draft the funds, you may be required to wire those funds to OnPay or deposit the taxes with the IRS directly.
Apart from those details, a year-end bonus can be run just like any other bonus as a special pay run.