Spreading the Tax on a Bonus Over the Year

Author: Julian Taylor

    1 minute read    

We’re excited to introduce a new feature that makes payroll even more flexible: Provision for Tax on Annual Bonus. This system item allows you to evenly distribute the tax deductions for a future-dated bonus over multiple pay periods, instead of deducting the tax all at once when the bonus is paid.

Why This Matters

Receiving a bonus is great, but it can often result in a high tax deduction in a single pay period. With this new item, payroll admins can spread the tax on the bonus over several pay periods: until the bonus is paid out, or until the end of the tax year. This ensures that employees have a smoother, more predictable take-home pay while still staying compliant with tax regulations.

Previously, saving for the tax on a future bonus required manual calculations and the use of a custom savings item, but with this new item, all of the work is done for you. We also cater for the event that the bonus or salary amount changes, or the provisioned amount needs to be paid out ahead of time.

For a step-by-step guide on how to set up the new Provision for Tax on Annual Bonus item, visit our help page here.

This feature was requested by you, our valued customers, and we’d love to hear how we can improve this functionality moving forward. Let us know your thoughts by clicking the NEW label next to the feature, and completing the form.

Should you require any assistance, please reach out to our friendly Support team at support@simplepay.cloud.

Want to know more about SimplePay? Check out our website, or try our payroll software for free with a 30-day trial. Get acquainted with our user-friendly software by reading our getting started page or taking our free online course.

Take care,

Team SimplePay