From the payroll point of view, bonuses are categorized into regular bonus (that is, a recurring event) and irregular bonus (such as a one-off incentive payment). However, from the tax calculation point of view, bonuses are categorized into periodic and non-periodic bonuses.
In a month in which your company pays a bonus and the regular wages and salary, you should use the simple adjustment tax calculation method to calculate the tax on bonuses. That means that the current period and the previous periods are taken into account as the taxable period. The taxable amount is the total taxable amount during the whole taxable period.
Use
According to the bonus type paid, the taxable amount and taxable period vary as follows:
Taxable = entire taxable amount since the previous non-periodic bonus
Taxable period = current month – previous month in which a non-periodic bonus was paid
Taxable = entire taxable amount since the previous periodic bonus
Taxable period = current month – month in which previous periodic bonus was paid
Taxable amount = entire taxable amount within the taxable period
Taxable period=(non-periodic bonus period + periodic bonus period)/2
If the quotient (taxable period) has a remainder, it should be rounded off.
