Bonus Payroll

Bonus payroll allows you to process bonus payments outside the regular payroll cycle, ensuring your employees receive additional compensation on time. This feature is perfect for distributing payments such as annual bonuses or performance-based bonuses. Notably, specifying a pay period is not necessary when processing a bonus payroll, allowing flexibility in rewarding employees as needed. Also, remember that bonus payments are subject to the federal supplemental tax rate of 22%.

Run a Bonus Payroll

PREREQUISITE Before you can start running payrolls for your organization, make sure you have completed the following:

Running a bonus payroll in Zoho Payroll involves three main steps:

Creating a bonus payroll
Approving the bonus payroll
Recording payment for the bonus payroll

Step 1: Create a Bonus Payroll

To create a bonus payroll:

Go to the Pay Runs module.
Click Create Pay Run on the top-right
Select Bonus Payroll from the dropdown.

Select a pay period for the bonus payroll (this step is optional).
Enter the Gross Pay (the bonus amount) for each employee.
Click the remove icon next to employees to exclude them from the bonus payroll.
Select a pay date for the bonus payroll under Payment Information.
Optionally, add any comments or notes in the Notes field for future reference.

Bonus Payroll Creation Page

Click Save Draft to save your progress or click Save and Continue to proceed.

Your bonus payroll will be created in Draft status. Review the payroll details, make necessary changes, and proceed to approve the payroll.

Step 2: Approve the Bonus Payroll

PREREQUISITE Ensure you have sufficient funds in your bank account to cover both the net payroll amount and all associated taxes.

WARNING Once you approve a bonus payroll, you cannot edit or delete it.

To approve a bonus payroll:

Go to the Pay Runs module.
Click Process Pay Run.
Click Approve Payroll on the top right.
In the popup that appears, click Approve Payroll.

INSIGHT If you have enabled Zoho Books integration, you can choose to post the journal entry for the payroll transaction in Zoho Books. The transaction will be recorded under the account configured during the integration setup.

Your bonus payroll will be approved. If you have set up Direct Deposit for your organization and employees, salaries will be deposited to your employees’ bank accounts on the payday. Additionally, applicable tax amounts will be deducted from your organization’s bank account and deposited to the corresponding tax agencies.

Step 3: Record Payment for the Bonus Payroll

If you pay your employees manually via check, cash, or any other payment mode, you can make the payment on the pay date and record it manually in Zoho Payroll.

To record payment for a bonus payroll:

Go to the Pay Runs module and open a payroll in the Payment Due status.
Click Mark as Paid on the top right.

PRO TIP To record payment for individual employees instead of recording for the payroll as a whole, click Mark as Paid next to the corresponding employee.

In the pop-up that appears, select the Paid Through Account and Payment Mode.
Enable Send pay stub notification email to all employees if you want to email the pay stub to your employees. Otherwise, leave it disabled.
Click Save.

The bonus payroll will be marked as paid, and applicable state and federal taxes will be generated in the [Taxes](#) module.