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At what amount do you tax spot bonuses?
Benefits & Compensation
At what amount do you tax spot bonuses?
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
we're looking at doing a one-time $100 bonus for employees if the company achieves certain metrics - the $ would be more for symbolic, thank-you reasons (CEO handing out $100 to each employee - ~60 ee
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Forums » Topic Forums » Benefits & Compensation » At what amount do you tax spot bonuses?
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At what amount do you tax spot bonuses?
posted at 2/26/2010 11:43 AM EST
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Posts: 31
First: 8/4/2000 Last: 7/8/2011 |
we're looking at doing a one-time $100 bonus for employees if the company achieves certain metrics - the $ would be more for symbolic, thank-you reasons (CEO handing out $100 to each employee - ~60 ees) than an incentive, per se.
Most places I've worked, the Finance group has said that we don't need to report anything at $100 or less... is there any IRS rule that governs this? |
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At what amount do you tax spot bonuses?
posted at 2/26/2010 11:49 AM EST
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Posts: 4
First: 2/26/2010 Last: 2/26/2010 |
My employer had been giving out $25.00 and $50.00 and $100 gift cards but we were recently told all had to be taxed per IRS regulations. I think we will be discontinuing the program because of the hassle dealing with the tax issue. |
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At what amount do you tax spot bonuses?
posted at 3/1/2010 6:55 AM EST
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Posts: 464
First: 6/30/2004 Last: 11/22/2010 |
All cash or cash equivalents are taxable.
Some companies will make an internal policy about what they will choose to report, however if they are audited and these payments are discovered, they will be taxable. |
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At what amount do you tax spot bonuses?
posted at 3/8/2010 5:52 AM EST
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
For small bonuses such as these, we gross up the amount so that the net is still $100 or $50 or whatever we wanted it to be. That way the employee is getting the benefit of the full amount and the employer is not in fear of an IRS audit!
But yes, it is taxable income to the IRS AND should be counted on income for FICA/State/Federal Unemployment reasons. |
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At what amount do you tax spot bonuses?
posted at 7/7/2010 10:14 AM EDT
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Posts: 2
First: 7/7/2010 Last: 7/7/2010 |
This is best answered by referring to IRS Publication 15 (Circular E). Visit the section "Supplemental Wages."
It appears you have the option to either withhold a flat 25% OR pay concurrently with regular wages to figure the income tax that way. Whichever way you choose, social security, medicare, and FUTA taxes. I did not see information regarding it not being taxable at $100 or less... |
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At what amount do you tax spot bonuses?
posted at 7/20/2010 10:16 AM EDT
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Posts: 37
First: 4/5/2006 Last: 7/20/2010 |
If you include on 1 check then the 25%is not necessary - it is simply calculated as part of that check. If a second check is cut then you need to do the 25% supplemental. If it is a one time discretionary type of bonus, I do not believe the OT recalculation is required - if it is labor based then you would have to recalc. |
Forums » Topic Forums » Benefits & Compensation » At what amount do you tax spot bonuses?
