Calculate_Payroll_Supplemental_Checks

Calculate Payroll - Supplemental Checks

A supplemental check entry is an additional payment made to an employee outside their regular payroll check. These payments are typically one-time or irregular in nature and are often used to compensate employees for things like bonuses, commissions, overtime, or corrections to previous payroll errors. 

Examples of supplemental checks: 

  • Bonus payments. If an employee is receiving a bonus or incentive pay separate from their regular payroll check, a supplemental check ensures these payments are processed correctly, often with a different tax withholding rate. 

  • Expense reimbursements. If an employee is getting reimbursed for business expenses, a separate check may be needed to avoid mixing taxable and non-taxable payments. 

  • Correction of payroll errors. If a mistake occurred ina previous payroll check (for example, mixing overtime or underpayment), a supplemental check allows for quick correction without waiting for the next payroll cycle. 

  • Severance or special payments. Payments like severance, retroactive pay increases, or settlement payments are sometimes processed separately for tracking and tax purposes. 

  • Different tax treatment. The IRS allows flat-rate withholding (22% for federal taxes in the U.S.) on supplemental wages, which may differ from  the employee's regular withholding method. This is useful when processes bonuses or lump-sum payments. 

  • Manual payroll adjustments. If an automated payroll settings don't support a specific payment scenario, an override allows manual adjustments to ensure accurate pay. 

 

In this section: 

How do I override payroll settings on supplemental checks? (2025.02)

 

 

 

 

 

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