Hourly wage and bonus pay

sssteel

We pay our production employees an hourly wage but we also pay them a bonus based on the amount of production that they produce each week. Resently our owner was told that we had to cut two checks: one for the hourly wage, and one for the production bonus they earn. This would be a huge headache for our payroll department not to mention extra amount of time it would take. We have always just paid one check but we have always specified that X ammount of dollars was for hourly wage and X ammount of dollars was for bonus. We specified this on every pay stub.

My question is this: Is there a law in the state of indiana that says you can not combine both hourly wage and bonus pay on the same check? Please let me know if anyone has ever heard or dealt with a problem like this? Thank you for all your help.

HRQ

Possibly your payroll system can't handle two different methods of calculating income tax on one paycheck?

The bonus pay is likely taxed at a higher rate than regular pay. We pay bonuses on a separate paycheck so they can be taxed differently.

Dutch2

Sorry.... don't know about Indy... but here they do not "have to be" from a state law. We do often print them out as a separate check in order to place more emphasis on them and to help reduce the tax amount.

ACU Frank

We print them on the same check, but I would rather do them separately (during the "off" week) to increase the impact. The CFO can't spare the accounting clerk for that extra 2 hours every quarter, though.

HRQ

Can't be that hard, unless you have really persnickety payroll software.

We pay bonuses on the 2nd pay period of each month. My assistant sets up a separate pay run for bonuses. It takes the same amount of time to key the data whether she's doing one run or six. Multiple pay runs create more reports, but that's about it.

It worked this way on both payroll software systems I've used.

Maybe the accounting clerk says it's too much work because he/she just "doesn't wanna."