Bonus Question and Answer

The month of December often includes paying out year-end bonuses. In the Pamiris system, this can be accomplished when running a Regular Payroll, by processing checks in-house and running a Manual Payroll, or by requesting a Custom Payroll be built.

In order to avoid confusion when the time comes, here is an FAQ on entering bonuses using the Pamiris sytem.

Q: What is Grossed-up vs. Not Grossed-up?

A: A Grossed-up Bonus means that the employer will cover all the Federal taxes, state withholding is excluded. As an example, an employer intends to pay an employee a $100 bonus. The employer, having selected Gross-up pays the amount of the bonus, ($100) plus all associated taxes ($100/.6935 in 2012). As a result, the employee will actually receive a bonus amount of close to $144.20. Any other taxes (state unemployement, state income, etc.), are assessed as usual.


Grossing up bonuses can be very costly to the employer but you have to think of it not as a $100 bonus but as a $144.20 bonus if you want the employee to receive a full $100 net bonus.

For a Not Grossed-up bonus, the employer pays the gross amount of the bonus ($100), but after associated taxes are taken out ($100 * tax % from employee W-4) the employee receives a net bonus amount that will vary, depending on their tax rate.

Q: How does Pamiris calculate the Grossed-up amount on a bonus?

A: Gross = Net/1 – (FIT rate + SS rate + Eme Med rate)

Q: What is discretionary vs non-discretionary?

A: A discretionary bonus is one given at the sole discretion of the employer, it is not an amount that has been promised to the employees. A non-discretionary bonus is given after the employer determines what standards are required to receive a bonus and an employee expects to receive that bonus if they have met those standards.

Q: How do I enter a bonus in the Pamiris system?

A: Log into the Pamiris system

  1. Go to Payroll.
  2. Go to Bonuses/Commissions .
  3. Choose an employee from the drop-down menu.Year End Bonus-Commissions
  4. Click Add.
  5. Choose an Effective Date from the drop-down calendar at the top of the page. (Effective Date needs to fall within pay period that you want to pay out funds).
  6. Enter amount of Bonus.
  7. Enter Description.
  8. Select type of Bonus (one button in each column must be marked before you can proceed).
  9. Click Save.
  10. View page with complete list of bonuses for every employee.
  11. Bonuses are not viewable on Bonuses/Commissions page once they are run in a payroll. They are viewable on paystubs and payroll reports.Add Bonuses
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About Pamiris, Inc.
Pamiris is an outsourced payroll, HR, and time tracking service provider with offices located in Portland, OR and Spokane, WA.

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