Bonus and commission payments

1. Go to the Payroll menu and choose Pay items.
2. Click the Wages and salary tab.
3. Click to open the Bonus or Commission pay item.
4. (Optional) Change the Name for his pay item, for example "Christmas Bonus"

5. (Optional) If you'd like a different, more personalised, name to show on pay slips for this pay item, enter a Name for pay slip, such as "Performance Bonus - Steven". If you leave this blank, the pay item Name will display on the pay slip instead.

6. If it hasn't already been set, choose the applicable ATO reporting category. If you're not sure, check with your accounting advisor or the ATO. Learn about assigning ATO reporting categories for Single Touch Payroll.
7. (Optional) If you want to track your bonus or commission payments through a separate account, select the option Override employees' wage expense account and choose the override account in the field that appears. Need to create a new account?
8. Under Allocated employees, choose the employees to be assigned this bonus or commission. To remove an employee, click the delete  icon for that employee.
9. Under Exemptions, choose any deductions or taxes that shouldn't be calculated on this bonus or commission. If you're not sure, check with your accounting advisor or the ATO.
10. When you're done, click Save.
11. If you need to set up an additional bonus or commission payment, click Create wage pay item and follow the same steps above. Learn more about Setting up pay items.

The bonus or commission pay item will now be available in each of the allocated employee's pays. When you do a pay run, you can enter the bonus or commission amount you're paying them. Or you can set a default payment amount for an employee as described below.

If an employee will receive the same payment amount each pay, you can set that amount. This means you won't have to enter the amount each time you pay that employee.

1. Go to the Payroll menu > Employees.
2. Click the employee's name.
3. Click the Payroll details tab > Standard pay.
4. Enter the amount they'll be paid against the applicable bonus or commission pay item.
   
5. Click Save.

The set amount will now be included each time you pay the employee. But you can easily change or remove the amount when you pay the bonus or commission as shown below.

To clarify if super should accrue on a bonus or commission payment, speak to your accounting advisor or check the ATO guidelines.

As per the Fair Work guidelines, leave doesn't accrue on bonus or commission payments, so you'll need to stop leave from calculating on those payments.

To stop super calculating on a bonus or commission

1. Go to the Payroll menu > Pay items.
2. Click the Superannuation tab.
3. Click to open the Superannuation Guarantee pay item.
4. Under Exemptions, choose the pay items you want to exclude from super calculations, e.g. Bonus and/or Commission.
5. Click Save.
6. Repeat steps 3-5 for each type of superannuation pay item that applies to the employees receiving the bonus or commission payments.

To stop leave calculating on a bonus or commission

1. Go to the Payroll menu > Pay items.
2. Click the Leave tab.
3. Click to open the Annual Leave Accrual pay item.
4. Under Exemptions, choose the pay items you want to exclude from annual leave calculations, e.g. Bonus and/or Commission.
5. Click Save.
6. Repeat steps 3-5 for each leave accrual pay item that applies to the employees receiving the bonus or commission payments, for example personal leave.

1. Go to the Payroll menu > Employees.
2. Click the employee who will be paid the bonus or commission. You'll be able to add the earning to additional employees later.
3. Click the Standard pay tab.
4. Under Earnings, click Add earnings > Create earnings pay item.
5. Enter a Name for the earning, for example "Christmas Bonus"

6. If you'd like a different, more personalised, name to show on pay slips for this earning, enter a Name of earning on payslip, such as "Performance Bonus - Steven". Otherwise enter the same text as the Name.

7. For the Type, choose Allowance.

8. Choose the Rate.

   Fixed amount per pay	same amount each pay
   Per unit	set amount per number of units, such as kilometres

9. Enter the Default rate. Or you can leave this set this to 0.00 and enter the amount when you do a pay run (see below).
10. (Optional) If you want to track these bonus or commission payments through a separate account, select the option Override employees' wage expense account and choose the override account in the field that appears. Need to create a new account?
11. Select the applicable Tax:
    • If the bonus is paid as a lump sum, choose Tax as extra pay. To check if a bonus is a lump sum payment, visit ird.govt.nz
    • If the bonus is paid regularly, choose Taxable.
12. Select the option Include in KiwiSaver contributions.
13. If the bonus or commission will be included in gross earnings for leave calculations, select the option Include in gross earnings. Most bonuses are included in gross earnings unless the bonus is discretionary. For help working out if the bonus should be included in gross earnings, visit employment.govt.nz
14. Under Employees using this pay item, choose all other employees who are to be paid this bonus or commission. To remove an employee, click the delete  icon for that employee.
15. When you're done, click Save. Here's our example:
    

The bonus or commission earning will now be available in each of the chosen employee's pays. When you do a pay run, you can enter or change the bonus or commission amount you're paying them. Or you can set a default payment amount for an employee as described below.

After setting up a bonus or commission earning (as described above), you can assign it to additional employees.

1. Go to the Payroll menu > Employees.
2. Click the employee's name.
3. Click the Standard pay tab.
4. Under Earnings, click Add earnings and choose the bonus or commission earning you created above.
5. If the employee will receive the same amount for the bonus or commission each pay, enter this value. If this is set to 0.00 you'll need to enter the amount each time you pay the employee.
   
6. Click Save.

If an employee will receive the same payment amount each pay, you can set that amount in their standard pay. This means you won't have to enter the amount each time you pay that employee.

1. Go to the Payroll menu > Employees.
2. Click the employee's name.
3. Click the Standard pay tab.
4. Enter the bonus or commission amount to be paid to this employee each pay.
   
5. Click Save.

The set amount will now be included each time you pay the employee. But you can easily change or remove the amount when you pay the bonus or commission as shown below.