Bonus reversals

Hello,
We have a situation where we need to reverse retention bonuses that were previously paid to employees. However, we do not want this reversal to affect the taxes already calculated and withheld.

Here’s an example to illustrate:

• For the 1/9/2024 pay period, an employee received a retention bonus of $5,000, which was added to their gross earnings. This is correct.
• Now, for the 8/9/2024 pay period, we need to reverse that retention bonus. However, this subtracts $5,000 from the gross earnings.

The issue is that this reversal (negative bonus) effectively reduces the gross earnings, which in turn recalculates and reduces the taxes. However, we do not want the negative bonus to affect the gross earnings which would impact the tax calculations.