How are bonuses taxed in Namely Payroll?

Namely offers two Bonus Pay Type Codes that can be used to process bonus payments to your employees.

• Bonus (W4): This pay type code will tax the payment at their W4 rate.

• Bonus: This pay type code will tax the payment at the federal flat rate of 22%.

We are unable to advise you on which pay type code should be used for your bonus payments, but both are available to you to ensure you're processing your bonus payments correctly in each instance. If you require a different tax treatment, our service team can help you add a new pay type code to Namely Payroll for you.