Can I use Square Payroll to pay my employees a bonus?

[Community-Team]

I need to pay out a bonus to my employees. Can I use Square Payroll to do so? Also, can it handle both one-time bonuses, and recurring ones (e.g.: for commission)?

[Nicole · Accepted solution]

Yes you can! Bonuses, also called supplemental income, can be easily processed through Square Payroll along with regular wages on the employee's paycheck. You may use the column titled “Additional Pay” to enter the appropriate amount of bonuses. Federal and state income tax will be withheld as if it were a regular payroll. Note that Square Payroll doesn’t currently allow for a standalone bonus payroll run with advanced settings to change taxation on the bonus.

For an illustration of how this will look in your online Square Dashboard, check out the video tutorial below.

[BrookWilkins]

Where do we find this "addtional pay" ?

[Nicole]

The Additional Pay column can be found on the Run Payroll screen.  You will enter any additional pay in the colum to the right of the hours columns. Again, the Additional Pay column can be used to pay additional bonuses, commissions, or other wages associated with the pay period. These amounts will be taxed and the net pay transmitted via direct deposit (or check).

[outofthisworld]

Where can you input a note describing the additional pay?  Like something that says 'holiday bonus' or 'christmas bonus'

[ashc]

Hey @outofthisworld! Welcome to the Seller Community.

If you go to the gross pay dollar amount, there will be 3 blue dots and if you click those- you can select to > Add Memo and put a note there! 

The note will appear on the paystub. 

[outofthisworld]

Thanks so much!

[ashc]

@outofthisworld Sure thing!

[smartstreet]

Has Square updated the ability to adjust the taxes withheld from a bonus payment?  Employee has overpaid in taxes and does not want additional tax withheld from their bonus. 

[ashc]

Hi @smartstreet!

I reached out to the Payroll team and they said you have the ability to mark them as exempt from state and federal income taxes.

In the employee's profile, under their W-4 and state tax settings, you'll select "this employee claims exemption from withholding". We don't have the ability to mark them as exempt from social security or medicare taxes, though.

[brakebread]

Is there a way to record cash bonuses within the Square Payroll system?

[ashc]

Hi @brakebread! Welcome to the Community.

Do you mean for reporting purposes or for a special kind of tax?

[brakebread]

Yes, for reporting purposes. So if I give a $500 cash bonus to an employee, is there a way to record that for tax purposes?

Thanks!

[ashc]

@brakebread Gotcha!

There's not a way to record this within the app but I do see how that would be useful. 

[Glynda4610]

Additional column does not appear on my payroll screen. Is it because I’m using an iPad?

[isabelle]

Hey @Glynda4610! ✨

Please take a look at this article and video. It has the most updated information on how to provide off cycle payments to employees. 

[BMBKF]

Still looking for how to pay a true bonus that isn't tied to hours.  I just want to enter a fixed, one-time payment amount and I don't see the ability to do this.  Because in our state we have taxes tied to hours worked, I don't want to enter an arbitrary hour amount to get to the correct bonus figure.  Why can't I just put in a fixed amount?  Especially when choosing an off-cycle, bonus payment. 

[Valentina]

Our Payroll team confirmed that you are able to submit an Off-Cycle Payment.

When you submit payroll, there will always be a column titled Additional.
This column allows you to enter a dollar amount instead of asking you to enter hours, @BMBKF.

I hope this helps, but please let us know if this isn't what you're looking to do.

P.S. Welcome to the Seller Community ✨