Believe it or not, the holidays are just around the corner. We’re sending you this message as a reminder to schedule your Puerto Rico Employee Christmas Bonus payrolls between Nov. 15 and Dec. 15, 2020. Please complete the action items below to ensure you’re on track for this Year End task.
Action items
Review your Christmas Bonus Report.
Before processing your Christmas Bonus payrolls, you must carefully review and verify the template report provided by ADP®.
To access this report:
1. Log in to ADP Workforce Now®.
2. Navigate to Reports > Custom Reports > Sample Reports.
3. Select the Puerto Rico (PR) Christmas Bonus Report.
Schedule your Christmas Bonus payrolls in advance.
Please be sure to process your Christmas Bonus payrolls 72 hours before the pay date and accept the payrolls promptly to avoid any penalties or interest for late bonus deposits. To be safe, we recommend scheduling them in advance.
To schedule your Christmas Bonus payrolls:
1. Log in to ADP Workforce Now.
2. Select Process > Payroll > Payroll Schedule > Add New Payroll.
3. For type of payroll, choose “Bonus.”
4. Select the appropriate taxation. (Review the taxation information below.)
Christmas Bonus taxation
Use the following ranges to determine how to tax your Christmas Bonus payrolls. If the bonus amount is:
· $600 or less, you should not withhold taxes.
· $601 to $1,500, include a 7% tax calculation without regard to personal exemptions, exemptions for dependents or allowances.
· More than $1,500, apply regular taxes based on employee setup and Hacienda Tables.
In order for these tax rules to be valid, you must process your Christmas Bonus payrolls between Nov. 15 and Dec. 15, 2020, either applying Special Effect 13 to the payroll or using Tax Frequency B at the employee level.
For Social Security, Medicare and the disability government plan, use Special Effect 15.
For cases where employee gross is equal to net …. GET CLARITY
** Gross = Net, the employer pays the employee's taxes, use special effect 14
Note: If your company has a private disability plan, using Special Effect 14 or 15 will not result in a private disability plan deduction. If you need to apply this deduction, you must enter it separately for each employee.
o Enter the appropriate dates
o Select the deduction group (if any)
o Make changes to special effects (if any)
If you have need support, please log into ADP Workforce Now and click the Support icon. This will take you to the Service Portal, where you can find knowledge articles, get your questions answered, submit a case and much more.