3 Ways to Avoid Payroll Hassles When It Comes to Holiday Bonuses
Holiday bonuses are a big part of the perks of being an employee. It feels good to be recognized with a monetary bonus for your efforts when you work hard all year, especially over the long holidays. If you are an Altamonte business owner and have not set up your payroll to include holiday bonuses, you still might want to do so for this coming season. Read below to learn more about how you can avoid payroll hassles when it comes to dealing with holiday bonuses to keep the season bright and merry!
Holiday Bonuses
Tis the season to be jolly and generous! For many business owners, the holidays are a chance to give their employees a little extra on their annual paycheck. These bonuses often reflect their hard work throughout the year and your appreciation for said work. Although it is never necessary for business owners to give out bonuses, it’s an excellent incentive for employees and boosts workplace morale. This can be especially important during the holidays, often the most stressful time of year for many business owners and employees alike.
1. Check the Legalities
The most significant aspect to keep in mind when handing out holiday bonuses is to keep everything legal and by the books. The last thing you need is to get in trouble with the IRS for doing something good. Just like regular wages, bonuses are not tax-free. This means that you must withhold any taxes that your employee has typically taken out for their paycheck; these include:
- federal income tax
- social security
- local income tax
- state income tax
- medicare tax
2. Incorporate Bonuses into Your Budget
As a business owner, you understand that your budget can make or break your business; if you are going to reward your employees for their hard work and dedication over the holidays, you must plan to include bonuses within your budget. Think of bonuses as a way to invest in the most critical part of your business; your employees. You may even see a potential return on this investment through better productivity, stronger morale, and higher employee retention. All you need to do is make sure that you can afford to make these investments, and the rest is easy.
3. Non-Traditional Bonuses
Not every business owner has the extra money to spare for bonuses, and that is entirely okay. However, if you are still in the spirit of giving, other options are out there for you. Instead of a monetary bonus such as cash or gift card, you can opt for a more non-traditional route. Instead, think more out of the box and offer your employees bonuses such as:
- extra paid time off
- flexible work schedule
- paid vacation
- extra sick days
We hope this article has given you a few pointers on avoiding payroll hassles regarding holiday bonuses. If you’re not careful, these bonuses can get lost in translation and lead to costly mistakes down the road. By taking a little time to consider all of your options, you can avoid these problems from the get-go. Be sure to contact our team here at Vision HR for a few extra tips on how working with a payroll company can help you avoid trouble in the future. Our online payroll services can help you sort out all of your holiday bonuses troubles and keep the holidays stress-free!
