Bonus Transactions

The Inland Revenue Department classes bonuses under two categories:

1. Lump sum payments - these are taxed as extra pays.
2. Regular bonuses - these are taxed depending on the frequency they are paid.
   1. Bonuses paid at the same time as a regular pay (e.g. Monthly employee receiving a bonus in each monthly pay) are treated the same as normal taxable earnings.
   2. Bonuses covering more than one pay period (e.g. Weekly/Fortnightly employees receiving a bonuses monthly) has tax calculated regular bonuses:

In this example, you opened the manual pay after closing Standard Pay # W/1 so the Pay Status form shows the following details:

You will use the manual pay to pay annual bonuses to the Sales staff. When you process the bonus transactions, Exolvo will add tax override details to ensure that employees are taxed correctly.

Topic: 23351