Skip to main content

Legal

Tax & Accounting

Trade & Supply

Risk & Fraud

News & Media

Books

Developers

Enter payroll checks

Calculate supplemental wages using on-demand payroll entry

For live payroll processing only
On the
Main
 tab of the
Payroll Items
 screen, you can select a
Regular
 or
Supplemental
 wage type. When the wage type is regular, you can choose if overtime and double time wages are supplemental.
note
The effects of using supplemental wages are largely dependent on IRS Publication 15. Refer to section 7 for more information.
When you include a supplemental type pay item in on-demand payroll checks, there are a few federal income tax withholding calculation options, including
Supplemental - Flat
 and
Supplemental - Aggregate
. Do the following to set up a supplemental pay item, create an on-demand batch of payroll checks, and get the federal income tax withholding with each calculation method:
  1. Select
    Actions
     then
    Enter Batch Payroll Checks
    .
  2. Select
    On Demand
     from the
    Payroll schedule
     dropdown.
  3. Select the new supplemental wage type pay item that you set up.
    note
    The
    Frequency
     will default to
    Non-periodic
    .
  4. Go to the Dates section and enter the appropriate dates, then go to the Employee section and enter the Gross Pay or Target Net Pay for the employees.
  5. Go to the Calculations to Disable section and edit any deduction or employer contribution items that shouldn't calculate on this check.
  6. In the Tax Withholding Calculation Method section, select
    Supplemental - Flat
     or
    Supplemental - Aggregate
     based on how you want the withholding to calculate.
Supplemental - Flat
: According to IRS Publication 15, you can withhold a flat 22% for supplemental wages payments up to $999,999.99 in a calendar year. If the supplemental wages for the calendar year exceed $1 million, the excess is withheld at a flat 37% or the highest rate of income tax for the year.
note
Accounting CS follows the rules for the applicable state(s) when performing this calculation.
Supplemental - Aggregate
: If the supplemental wages are paid at the same time as regular wages, you can add the supplemental wages to the regular wages from the preceding payroll period, figure the income tax withholding according to the tables in Publication 15, subtract the tax withheld from the regular wages, and then withhold the remaining amount.
You pay Jane Doe a salary on the first of every month. She is single and claims one allowance on her W-4. Her pay at the first of the month is $2,000.00, and you withhold $186 in Federal Income Tax. Halfway through the month, you pay her a bonus of $1,000.00.
  1. Add her regular pay and her bonus (2,000 + 1,000 = 3,000).
  2. Using the tables in IRS Publication 15, the withholding should be $336.00.
  3. Subtract the amount already withheld from the combined withholding amount ($336.00 - $186.00 = $150.00).
  4. $150.00 is withheld from the bonus.

This article applies to:

  • Product: Accounting CS
  • Subject: Payroll checks

error-icon

Triva isn't available right now.

Check out the support page for our phone number and hours

error-close