How tax is calculated on Bonus payments?

Tax on bonus can be calculated with two ways depending on frequency of payment.

We can add a pay category for "Bonus" and use this while processing payment (For regular monthly Bonus).

However If Bonus payments are to be paid for more than one pay period it can be processed through "add Lump sum Payment" option within the employee's earnings so that tax is calculated Marginally.

Kindly refer to below step by step instruction.

  1. Select the "Actions" button in the bottom right hand corner of the employee's earning details, see below:

  2. Select "Add Lump Sum Payments" from the pop up menu.  An "Other Earnings" line will be added, see below.  You then need to select the pay category you are wanting to pay the lump sum against;

  3. If you hover the cursor over the blue "Lump sum payment" indicator, it will give you direction on how to treat a lump sum payment, see below;

  4. In this example, see below, 228 hours are owing as a lump sum, and it is spread out over a 6 weekly period.  You just need to fill in how many weeks the PAYG will be spread over and the amount of hours owing.  The rate will be determined by the pay category selected.  However, the rate can be overridden.  Then hit the save button that appears.

  5. The pay will now include the lump sum payment and with the right PAYG calculated.




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