How Do Taxes Work With Bonuses?
Bonuses, frequently given at the end of the year, are a popular "thank you" for a job well done, and smart business owners know they can build loyalty, helping retain the most productive employees. However, both owners and employees often misunderstand how taxes work with bonuses, leading to confusion and frustration. Fortunately, with some education and preparation, the situation can work out for everyone.
Bonus Calculations and FLSA Rules
Bonuses are a form of variable pay that are used to inspire employee loyalty or reward performance, and it's essential to know about the different kinds.
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