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A) If the bonus is entered into a payroll where there are NO REGULAR PAGESWAGES present, then the Clarity software does not have regular wages to use in the calculation of the bonus. Therefore the annual tax is being calculated ONLY on the bonus amount. Don’t forget, 99% of the time your bonus payments will likely be BELOW the employees annual tax credits and therefore the system sees this as the employee owing no taxes.
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REGULAR WAGES ARE ALSO BEING PAID AT THE SAME TIME.
Q) I have a category paid as Bonus and the taxes are coming out way to high, why?
A) Similar to the above question, however, because the employee has no regular wages categories included in the payroll that you have choosen to do payroll for (example: you normally pay the employee “Salary” but have removed it from the “active categories” in the payroll you are running) the system has no details on the regular payroll. The Clarity software will then assume you’ve made an error and treat the bonus category as a “regular” payment type, ignoring the “tax as bonus” flag.