How do I issue a separate check for a bonus?

•The short answer is don't!

•If you issue a separate check for a bonus, you MUST override the built in calculations and withhold at the federal and state 'supplemental' rate (which is usually their highest percentage).

•If the idea is to get the most net pay to the employee, as well as to avoid manual calculations, issuing a supplemental check is not the way to go.

•If you must issue a separate check, be sure to manually override the federal withholding and state withholding amounts to the amounts specified in the federal and state guidebooks.

•Be prepared to have a conversation with the employee about the reason for the abnormally high withholding amounts...

How do I pay a bonus easily, and get the most net pay to the employee?

•Add the bonus amount to the employee's next regular paycheck.

For details on the various methods of paying supplemental wages (such as a bonus), refer to IRS Publication 15 as well as your state employer's guidebook.