How to issue a bonus to a director: an ordinary order will not do

Documentation of the bonus procedure

The conditions for bonus payments to the head of the organization must be provided for in the employment contract. When determining these conditions, the founders (participants, shareholders) must establish:

• indicators for which the manager is entitled to bonuses;
• types and amounts of bonuses and remuneration;
• sources of payment of bonuses;
• the procedure for making decisions on the payment of bonuses to the manager.

An example of how to reflect bonuses for the general director in an employment contract

A.V. was appointed General Director of Alpha LLC. Lviv. In addition to the official salary, the company's members approved indicators and bonus conditions for it. These indicators are reflected in the employment contract.

In addition, the conditions for paying bonuses to the director may be specified in the general Regulations on bonuses for employees of the organization, a collective agreement or other local act. Then it is not necessary to decipher them in the employment contract. It is enough to provide a link to the internal document (letters of the Ministry of Finance of Russia dated February 26, 2010 No. 03-03-06/1/92, dated February 5, 2008 No. 03-03-06/1/81).

Sample order for bonuses for the general director

1. /
2. /

December 14, 2021 0 Rating Share Bonus for the general director - a sample decision of the founders or a corresponding order can be developed at the enterprise and approved by authorized persons (as a rule, this is stated in the constituent documents of the company).

In the article we will consider in detail the procedure for bonuses to the general director and other important points relating to this issue.

The CEO is an employee, like all other employees of the organization. The difference from others lies in the special procedure for his appointment and removal from office, as well as his job responsibilities. In this regard, he, like others, has the right to apply for a bonus based on the results of his work.

Labor Code of the Russian Federation in Art. 135 determines that systems for remuneration of employees and their bonuses can be established by the employer in local acts of the enterprise, agreements or collective agreement. Also in the Labor Code there is Art. 57, which contains a clause stating that the conditions for assigning incentive payments must be included in the employment contract.

In practice, an employment contract usually includes a reference to the bonus clause, rather than describing the entire procedure. Thus, the general director has no right to arbitrarily assign a bonus to himself, nor does he have the right to determine its size.

This can only be done by his employer by issuing a decision, order or signing the minutes of the general meeting (executive body of the company), if we are talking about a one-time bonus.

The basis for assigning a bonus to the general director is an administrative act of the employer (executive body). The initiators of issuing such an act may be, in particular:

1. general meeting;
2. collegial executive body with a different name, depending
3. Board of Directors;

Documentation of bonus accrual

Give one-time bonuses to the director:

• or on the basis of the minutes of the general meeting of participants (shareholders);
• or based on a decision of the board of directors or supervisory board;
• or based on the decision of the sole participant (shareholder who owns all voting shares) of the organization.

An example of how to draw up minutes of a general meeting of participants on the payment of a bonus to the general director

For the fulfillment of the established bonus indicators, the participants of Torgovaya LLC approved a quarterly bonus to General Director A.V. Lvov. This decision was documented in the minutes of the general meeting.

Attention: a hired director does not have the right to sign an order to accrue a one-time bonus to himself. This contradicts Part 2 of Article 135 and Article 191 of the Labor Code of the Russian Federation, which require that the decision on bonuses for an employee be made by the employer.

Payment of a bonus to a director on his own order may be considered inconsistent with labor legislation. In this case:

• the tax inspectorate can challenge the reduction of taxable profit by the amount of the premium (Article 255 of the Tax Code of the Russian Federation);
• founders (participants, shareholders) may demand from the director full compensation for damage caused to the organization (Article 277 of the Labor Code of the Russian Federation, Article 45 of the Law of February 8, 1998 No. 14-FZ and Article 71 of the Law of December 26, 1995 No. 208 -FZ);
• founders (participants, shareholders) can dismiss the director of the organization (clause 9, part 1, article 81 of the Labor Code of the Russian Federation).

Inspectors can detect this violation during an on-site or desk inspection, and the founders (participants, shareholders) can detect it from the organization’s reporting.

Situation: how to arrange a bonus payment to the general director if he is the only full-time employee of the organization?

The procedure for completing documents for payment of bonuses does not depend on the number of full-time employees. Therefore, in any case, award the bonus to the general director according to the decision of the founders (participants, shareholders) of the organization. The size of the bonus may depend on the degree of achievement of production targets or on the actual time worked. In this case, use financial statements, time sheets and other documents necessary to calculate the bonus.

CEO Award

Content

This type of remuneration to a director can be assigned only on the basis of the minutes of the general meeting of shareholders of the company. A one-time payment is a bonus payment that a director can receive in connection with certain events (the completion of a project that is significant for the company, the company’s anniversary, the director’s birthday).

When all the documentation necessary to assign a bonus to a manager is ready, it is transferred to the accounting department for accrual.

The appointment order specifies the timing of the transfer of remuneration to the director.

If payment is untimely, then responsibility rests with the employee whose fault it was.

If there are no such deadlines, then the payment of a one-time remuneration is made together with the payment of wages. The bonus can be handed over to the director or transferred to his salary card. The procedure for awarding bonuses to a director can be specified in the bonus regulations that apply in the organization, as well as in the director’s employment agreement.

To pay, you need to draw up the minutes of the general meeting of shareholders and the decision of the sole founder, and then an order for bonuses is issued. A permanent bonus is awarded to the director on the basis of accounting and static reporting, as well as operational accounting data.

A permanent bonus is issued by order, which indicates the name of the recipient, the type, size and grounds for payment of the remuneration. The bonus order is announced to the director against signature. This type of bonus is assigned based on the results of work for the reporting period.

A petition from a legal point of view means a request that is sent by government bodies that have the authority to consider and resolve it.

Important! The regulations for the preparation of documentation on the appointment of a bonus to a director must be approved by the local regulatory act of the company or regulated at the regional level.

The form of this document is free, but there are a number of rules that must be followed.

Accounting

The procedure for reflecting bonuses to managers in accounting depends on the sources from which bonuses are paid:

• due to expenses for ordinary activities;
• at the expense of other expenses;
• due to net profit.

Write off the bonus accrued to the manager for meeting production targets as expenses for ordinary activities (clauses 5 and 8 of PBU 10/99). Reflect its accrual by posting:

Debit 26 (44) Credit 70

– a bonus was awarded to the director of the organization.

Non-production bonuses (for anniversaries, holidays, etc.) are classified as other expenses in accounting (clause 11 of PBU 10/99). Make the following entry in accounting:

Debit 91-2 Credit 70

– the bonus is accrued at the expense of other expenses.

If the source of payment of bonuses (both production and non-production) is retained (net) profit, make the following entry:

Debit 91-2 Credit 70

– the bonus is accrued at the expense of net profit.

Such an entry must be made regardless of whether the net profit of previous years or the current year is used to pay the bonus (including profit based on the results of the quarter, half a year, nine months). The fact is that such expenses cannot be reflected using account 84. These will be other expenses that also affect the financial result of the organization. Accordingly, such expenses must be reflected in the debit of account 91-2. Similar explanations are given in letters of the Ministry of Finance of Russia dated December 19, 2008 No. 07-05-06/260 and dated June 19, 2008 No. 07-05-06/138.

This order follows from the Instructions for the chart of accounts (accounts 26, 44, 70, 84, 91).

Accounting for payment of bonuses to the director

The procedure for reflecting the payment of bonuses to the director in accounting will depend on what serves as the source for its payment:

• the bonus is paid out of expenses for ordinary activities;
• The premium is paid out of other expenses.

The production bonus is written off as expenses for ordinary activities , and the posting will be as follows:

D26(44) K70 – the director received a bonus.

The non-production bonus is written off as other expenses and the posting will be as follows:

D91 subaccount “Other expenses” K70 – the bonus is accrued at the expense of other expenses.

Personal income tax and insurance premiums

Regardless of what taxation system the organization uses, calculate personal income tax on bonuses to the manager (clause 1 of Article 210 of the Tax Code of the Russian Federation). For the amount of premiums, add contributions to pension (social, medical) insurance and contributions to insurance against accidents and occupational diseases. This rule applies regardless of whether the bonus is provided for in the employment contract or not (part 1 of article 7, article 9 of the Law of July 24, 2009 No. 212-FZ and part 1 of article 20.1, article 20.2 of the Law of 24 July 1998 No. 125-FZ).

Income tax

When calculating income tax, take into account bonuses as part of labor costs if bonuses are paid for production indicators stipulated by the employment contract, and the source of their payment is not net profit (clause 2 of Article 255, clauses 1 and 21 of Article 270 of the Tax Code RF). Similar recommendations are given in letters of the Ministry of Finance of Russia dated November 30, 2009 No. 03-03-06/4/101, dated November 21, 2008 No. 03-03-06/4/85, Federal Tax Service of Russia dated August 20, 2014 No. SA-4-3/16606, dated May 20, 2010 No. ShS-37-3/1977. Despite the fact that these letters are addressed to state unitary enterprises, the conclusions of officials can also be applied by commercial organizations.

Executive bonuses are indirect expenses. Therefore, if an organization calculates income tax using the accrual method, these costs are fully attributed to the expenses of the current period (clause 2 of Article 318 of the Tax Code of the Russian Federation).

When using the cash method, take into account the costs upon payment of the premium (clause 3 of Article 273 of the Tax Code of the Russian Federation).

Bonuses and remunerations that are accrued to the director in excess of the amounts provided for in the employment contract cannot be taken into account for taxation (Clause 21, Article 270 of the Tax Code of the Russian Federation). Bonuses that are not related to the manager’s performance of his job duties (for example, bonuses for holidays, anniversaries) also do not reduce the tax base for income tax. Such payments do not meet the criterion of economic justification of costs (clause 1 of Article 252 of the Tax Code of the Russian Federation). A similar position is contained in the letter of the Ministry of Finance of Russia dated January 20, 2005 No. 03-05-02-04/5 and confirmed by arbitration practice (see, for example, the resolution of the Federal Antimonopoly Service of the Ural District dated January 11, 2006 No. F09-5989/05-S7 ).

For accounting for bonuses paid out of net profit, see How to register and record payment of bonuses out of net profit.

Can a director reward himself?

Author of the article Yulia Bakirova 2 minutes to read 3,064 views Contents The director does not have the right to personally decide on awarding himself a bonus. Such a decision can only be made by his direct employer, which for the director is the founder of the company.

In answer to the question whether a director can give himself a bonus, we will figure out how to correctly calculate a bonus to a director and how to take it into account when calculating income tax. A hired director does not have the right to independently make a decision and give himself a bonus. This statement follows from articles and, according to which the decision The employer must accept the bonus. If the director is employed, then his employer is the founders of the company (participants or shareholders) (14-FZ of 02/08/1998, 208-FZ of 12/26/1995). Thus, the accrual of one-time bonuses to the director of the company is possible on the basis of one of the documents:

1. the decision of the sole participant of the company (shareholder owning all voting shares).
2. minutes of the general meeting of company participants (shareholders);
3. decision of the board of directors (supervisory board);

The head of the company may receive a bonus if this is provided for in his employment contract.

The founders (participants or shareholders) must determine the following:

1. types of bonus payments, as well as their size;
2. indicators for which the director is entitled to a bonus;
3. the procedure by which the decision to pay a bonus to the director is made.
4. source of premium payment;

For example, an employment agreement with a director stipulates the amount of his salary, as well as performance indicators and the possibility of bonuses. Also, the conditions for accruing bonuses to the director may be provided for in the Regulations on bonuses or a collective agreement.

In this case, it is not necessary to indicate in the employment contract the indicators and conditions for calculating the bonus.

To do this, it will be enough to provide a link to the local act. For each bonus payment you will need to draw up an administrative document.

simplified tax system

Organizations that pay a single tax on the difference between income and expenses can include premiums in costs that reduce the tax base for the single tax (subclause 6, clause 1, clause 2, article 346.16 of the Tax Code of the Russian Federation). However, this is possible if two conditions are simultaneously met:

• bonuses are provided for in the labor (collective) agreement;
• bonuses were paid for labor performance.

Include the amount of bonuses in expenses at the time of their payment (clause 2 of Article 346.17 of the Tax Code of the Russian Federation).

An example of taxation of a quarterly bonus accrued for production results. The organization applies a simplification, pays a single tax on the difference between income and expenses

Alpha LLC uses simplification. The single tax is paid on the difference between income and expenses.

The Alpha bonus regulations and the employment contract provide for the payment of quarterly bonuses to the general director for meeting production targets. The list of indicators is defined in the employment contract with the general director.

In April, Alpha General Director A.V. Lvov received a bonus based on the results of the first quarter. The bonus amount is 25 percent of official salaries for the quarter. Lvov’s salary is 100,000 rubles. per month. Prize amount – 75,000 rubles. (RUB 100,000 × 3 months × 25%).

The bonus is awarded for achieving the following indicators:

• an increase in the volume of products sold by the organization by 10 percent compared to the corresponding period last year;
• reduction of costs associated with production and sales of products by 3 percent.

The bonus was accrued and paid on April 10.

The bonus amount will be included in the personal income tax base for April. Lvov has no rights to deductions for personal income tax.

Personal income tax on the premium amount is equal to: 75,000 rubles. × 13% = 9750 rub.

The organization calculates contributions to compulsory pension (social, medical) insurance according to the basic tariff. Contributions for insurance against accidents and occupational diseases - at a rate of 0.2 percent.

The amount of contributions for insurance against accidents and occupational diseases from the premium amount was: 75,000 rubles. × 0.2% = 150 rub.

The amount of insurance premiums is 22,500 rubles, including:

• contributions for compulsory pension insurance – 16,500 rubles. (RUB 75,000 × 22%);
• contributions for compulsory social insurance - 2175 rubles. (RUB 75,000 × 2.9%);
• contributions for compulsory health insurance credited to the Federal Compulsory Medical Insurance Fund - 3825 rubles. (RUB 75,000 × 5.1%).

On May 15, the accountant transferred insurance premiums to the budget.

When calculating the advance payment for the single tax for the six months, the accountant took into account both the premium itself (75,000 rubles) and the contributions accrued on it in the amount of 22,650 rubles as expenses. (RUB 22,500 + RUB 150).

Do not include the amount of non-production bonuses as expenses. This approach is confirmed in private letters from the Ministry of Finance of Russia (paragraph 2, paragraph 5 of letter dated July 5, 2004 No. 03-03-05/2/44).

If an organization pays a single tax on income, the amount of the premium does not reduce the tax base (clause 1 of Article 346.14 of the Tax Code of the Russian Federation).

Grounds for payment of annual bonus

The grounds for bonuses may vary. The letter of the Ministry of Labor of Russia dated September 21, 2016 No. 14-1/B-911 states that bonuses are awarded for labor results, achievement of certain indicators, after their assessment by the employer. Accordingly, bonuses are related to the work activities of a specific employee or department. This distinguishes bonuses from financial assistance, which can be awarded regardless of the results of employees’ work.

Despite the above clarifications of the Ministry of Labor of the Russian Federation, bonuses can also be paid on holidays, for example, an employee’s anniversary, since the Labor Code of the Russian Federation does not directly prohibit this. An annual bonus can be paid even without the employee’s obvious achievements in his career.

The list of grounds for paying bonuses at the end of the year is not limited by law (they can be anything). This gives the employer some freedom in choosing the reason for payment.

In particular, the grounds for annual bonuses may be:

1. High quantitative indicators of work activity, for example, fulfilling a plan, creating a certain amount of material assets, providing a certain amount of services, etc.
2. Good quality indicators. This is compliance of manufactured products with standards, GOST, SNiP, etc., or the absence of complaints about the quality of products or services provided by customers.
3. Impeccable discipline records. For example, the absence of disciplinary sanctions against the employee/employees during the year, compliance by employees with internal labor regulations, etc.
4. The complexity of the work being performed. Performing particularly complex and responsible tasks by employees throughout the year.

OSNO and UTII

If an organization applies a general taxation system and pays UTII, it is necessary to keep separate records of bonuses to the manager for different types of activities. Bonuses accrued for achieving specific indicators are expensed for the type of activity to which they relate. If the bonus is paid for the overall results of the organization’s work, it must be distributed (clause 9 of article 274, clause 7 of article 346.26 of the Tax Code of the Russian Federation).

This is due to the fact that when calculating income tax, expenses associated with activities on UTII cannot be taken into account.