Bonuses: Why They Must Run Through Payroll
Handing out a bonus is one of the best ways to recognize your team’s hard work. Whether it’s a holiday thank-you, a performance reward, or a surprise incentive, employees love to know their efforts are valued. But here’s the part many business owners don’t realize: a bonus isn’t just a gift — it’s taxable income. That means every bonus must go through your payroll system, just like a regular paycheck. Why Bonuses Must Go Through Payroll: Tax compliance: The IRS and state agencies classify...