Our Payroll Mate software has a built-in bonus income type, allows you to custom add income / tax types and to override any default calculations at the time of creating the payroll checks.
A simple formula can be applied in this situation in order to give an employee the intended amount of a bonus payment (supplemental pay):
Total Income Amount = [Intended Net Bonus Payment] / [1-Applicable Payroll Tax Rates]
For example if the intended net bonus payment is $1000 then:
Total Income Amount = 1000 / (1-0.25-0.062- 0.0145) = $1484.78
In this example the supplemental Federal withholding rate is 25%, the Social security tax rate is 6.2% and the Medicare tax rate is 1.45%. This example assumes state tax rate is zero, otherwise it needs to be taken into consideration.
Real Business Solutions Support Team, Makers of W2 Mate and Payroll Mate
708-479-8731
