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S
SarahCO
New Member
July 13, 2026
Question

Discretionary Bonus

  • July 13, 2026
  • 1 reply
  • 31 views

I need to create a new bonus type for an employee for a discretionary bonus. I have tried going into the employee, clicking “add” under “additional pay types,” and clicking “new pay type.” But after doing that, under “type” it doesn’t have the option of bonus. My advisor told me that I need to enter this bonus differently than our regular annual bonuses, as it is a discretionary bonus. How do I go about doing that?

1 reply

J
Jessavell_AQuickBooks Team
QuickBooks Team
July 13, 2026

QuickBooks has the Bonus hardcoded on the previous menu, which is why it doesn't appear in that specific dropdown. Your advisor is absolutely correct. Since this is a discretionary bonus, it’s wise to track it separately from your regular annual bonuses. This approach helps maintain accurate overtime calculations and gives you better control over tax withholdings.

 

To complete the setup, you can select Other Earnings as the Type. Here’s how to do it:

 

  1. In the box labeled Name (as shown on paycheck), enter a custom name like "Discretionary Bonus".
  2. In the Type field, select Other Earnings.
  3. Click the green Save button at the bottom.

 

Before you run the payroll, we need to ensure this is processed exactly as your advisor intended. Did your advisor specify how they want the taxes withheld on this bonus?

 

Because you're setting this up as Other earnings on their regular profile, adding this amount to their normal paycheck will combine it with their regular wages for tax calculations. This can result in a higher tax withholding for that specific check. If your advisor prefers to use the IRS flat 22% supplemental tax rate for this bonus, you'll need to process it as a separate Bonus only payroll run.

 

I look forward to your reply. Please feel free to revisit this thread if you have any additional questions.

S
SarahCOAuthor
New Member
July 13, 2026

Thank you for your quick response. I was planning to enter it as a separate bonus only payroll run, but when I try to do that, I don’t have the option to use the newly created discretionary bonus pay type. Am I doing something wrong?

J
JoelESQuickBooks Team
QuickBooks Team
July 14, 2026

You are not doing anything wrong. The new discretionary bonus pay type isn't showing up because the Bonus-only payroll option is designed specifically for the primary bonus pay type. Since the discretionary bonus is set up as other earnings, the system naturally filters it out of a bonus-only run.

 

To get your employee paid, you have two options depending on what features you need for this check.

 

If you want to keep using the custom other earnings item you created, you'll need to run a standard payroll instead of selecting the Bonus-only option. Your custom column will appear when you open the standard run payroll screen. To keep this check separate from their regular wages, simply zero out the employee's regular salary or hourly fields for this specific run and enter the bonus amount directly into your custom column. However, if you need to use the as net pay feature to ensure the employee takes home an exact amount, please know you are required to use the Bonus-only screen.

 

Let us know which route works best for you and your advisor's tax strategy. If you have any more questions, feel free to reply below.

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