Bonus checks, cash and/or gift card values are required to be added to an employee’s gross pay;
– for taxes, per IRS guidelines for all locations
– for 401k voluntary contributions per SEC guidelines
– for 401k employer match & discretionary percentages
– for the Lay Pension Frozen contribution, for Archdiocese retirement locations
NOTE: Please contact Paylocity Service for instructions.
Include the bonus in a regular pay run to include with regular pay as a direct deposit. The amount will be listed on the earnings statement as Bonus. A simple Bonus letter or certificate can be created for the employee that reflects the amount of the bonus, (you can get creative). It can be noted that the bonus will be added to your gross pay for the payroll date.
Eligible employee bonus pay is subject to set voluntary contributions and both the 2% 401k match contribution, (if a Voluntary contribution is made) and the 2% 401k discretionary contribution, (regardless if a voluntary contribution is made or not). The Archdiocese 401k Plan policy requires that employee and employer 401k contributions be based on total W2 gross wages, which includes bonus or gift pay.
DONATIONS or GIFTS:
IRS RULES ON MONETARY DONATIONS/GIFTS If parents or parishioners write a check to the school or parish as a donation and the school or parish then presents a bonus to an employee of all or a portion of that money, the full amount of the bonus is taxable and should be included in the employee’s gross wages. The donation from the parent or parishioner is considered a charitable contribution and is tax deductible to the person making the donation.
Holiday gifts, such as a turkey, gift basket, etc. with nominal value are considered “de minimis” for fringe benefit taxation. For a complete overview of fringe benefit taxation please visit www.irs.gov.