At the end of the year, many clients will be running bonus pay runs. There are a few things to keep in mind:
- Direct deposit limits: Many times, a bonus payroll can exceed your pre-approved direct deposit limit. Please be aware that in some cases, when the amount exceeds your limit, a wire may be required to pay your employees by the date of your choice.
- IRS Next-Day Rules: Keep in mind that bonus runs qualifying for the IRS Next-Day Rules (i.e. runs resulting in $100,000 or more in federal tax liability) must be run five (5) business days before the check date. If you wish to run those bonuses for a check date of December 31st, please complete the run no later than December 23rd so we have 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.
How to run a bonus payroll in OnPay
- Login to OnPay. From the Dashboard, go to Payroll > Run Payroll.
- On the Select Employee screen, click "Check Date" at the top of the screen.
- Set the check date and period start/end dates. If you want to run paper checks instead of direct deposit, tick “Hold all direct deposits and process as Paper checks?” in this window. Click “Okay”.
- Progress to “Enter Hours”. Untick and zero out any other pay categories (Salary, Overtime, PTO, etc.).
- Tick “Bonus” and enter the amount of the year-end bonus for employee(s).
- Progress to “Review Payroll”. Double check that all withholdings look correct, and then progress to “Approve Payroll”.
- If you opted to process as paper checks, print them to distribute year-end bonuses to your employees. Otherwise, they will receive the bonus by direct deposit.