Cash bonuses: registration, accounting, taxation

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Employees are given bonuses as incentives for quality work and length of service. It can be paid annually, monthly or quarterly. The employer decides how often to stimulate employees. Taxes are collected on employee salaries, and many people wonder if bonuses are taxable.

A little theory: accounting concepts and types of bonuses

The bonus is an optional payment. This is a monetary reward for an employee for special merits. There are several types of incentives:

• by form of payment: in cash or in the form of a gift;
• by frequency of payments: one-time or for a certain period;
• by appointment: for performing special tasks;
• according to the indicator: for the anniversary, for length of service.

According to Article 191 of the Labor Code of the Russian Federation, bonuses can be awarded for:

• high qualifications;
• high labor achievements;
• active in the development of the company.

What kind of awards are there?

Production, regulated and provided for by labor, collective agreements or internal wage regulations are:

• For fulfilling the production or sales plan
• For cost reduction

Non-productive – not directly related to the work process:

• For length of service
• For proposed innovations
• For conscientious work

Depending on the frequency of the awards, there are:

• One-time
• Monthly
• Quarterly

Conditions for awarding bonuses

There are several official conditions for bonuses for employees:

1. Federal Law No. 208. If one of the founders of the organization decides to award a bonus to employees, he makes this decision together with his colleagues.
2. Article 129 of the Labor Code of the Russian Federation. The procedure for calculating monetary remuneration must be specified in the employment contract.
3. Article 135 of the Labor Code of the Russian Federation. All issues of bonuses for employees must be agreed with the trade union, if there is one at the enterprise
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The procedure for calculating bonuses

Bonuses vary in size depending on the category of employee. For example, a shop floor worker may receive bonuses for extra hours of work or large quantities of goods produced at the factory, while the head of a department will receive an award for a successfully modeled business plan.

The usefulness of the employee efforts cited as examples varies, and accordingly, the size of bonuses will vary significantly.

Bonuses can be either a set amount or depending on some indicator (for example, a percentage of the sale of goods).

Monetary remuneration may also be accrued to an employee who is in

maternity leave. The size of such payment will also differ from the fixed one and is determined by the company management.

All of the above types are united by a single obligation: the accrual and payment of monetary rewards is impossible without issuing an appropriate order. It must be signed by the recipient employee, as well as by the head of the company. In addition, bonuses paid systematically are fixed:

• in the employment contract;
• in a collective agreement;
• in local acts.

Also, at the request of both parties, this can be documented in the following documents:

• payroll or payroll;
• expense cash order (according to form No. KO-2).

Payment for a business trip on a day off - this can be achieved by knowing a number of legal subtleties. Falsifying sick leave is a criminal offense. Follow the link for more information.

How to get maternity benefits for your husband? Read more about this in our article!

Taxation procedure for bonuses

Employers ask whether the bonus is subject to personal income tax. Their doubts are justified: firstly, such remuneration is always the employee’s income, and the income is taxed; secondly, the bonus is not remuneration.

The answer to this question lies in the first point: the premium is income. According to Article 209 of the Tax Code of the Russian Federation, personal income tax and insurance payments are paid from it. Income tax on remuneration is calculated as standard. Awards received for high achievements in scientific activities, employee rewards in honor of a holiday, and monetary rewards not exceeding 4,000 rubles are exempt from personal income tax.

Taxation and accounting of employee bonuses

The specifics of taxation of bonus incentives are largely determined by their type. Remunerations for special production results are included in salaries (expenses for ordinary activities) and can be either one-time or regular (monthly, quarterly, annually). They are included in cost. The employer has an obligation to pay such bonuses, since they are provided for by the payment system.

Non-production incentives are assigned as one-time payments, are not part of the salary, and are taken into account in other expenses for the reporting period. Such incentives are paid only according to the distribution of the head of the organization. When paying bonuses from a stock source based on the owner’s decision, they are attributed to the undistributed (or accumulated, accumulated) profit of previous years.

Thus, production bonuses are paid under agreements (collective, labor) and are associated with production and sales costs. They are economically justified and involve generating income. Conversely, incentives of a non-production nature are not related to the performance of employees’ job duties and tax expenses are not taken into account. According to the Tax Code of Russia, Art. 270, paragraph 21, they are not taken into account when calculating profit in expenses.

Regardless of the taxation regime, the following are calculated for all types of bonuses paid from net profit:

• Personal income tax (13% for tax residents of Russia);
• insurance payments (FSS - 2.0%, PFR - 22%, FFOMS - 5.1%, from accidents - 0.2%).

⊕ Insurance premium rates for 2021

Taxpayers here are individuals (individual entrepreneurs and citizens, residents of the Russian Federation). These are working people who have income. The bonuses received are part of this income at the place of employment.

Exceptions are presented in the list of the Tax Code of the Russian Federation, Article 217 (clauses 6, 7). This includes awards for outstanding achievements in the field of culture, science, technology, art, etc., as well as for senior officials. These types of income are not subject to taxes.

Why is it profitable to pay taxes on employee bonuses?

Articles 255 and 272 of the Tax Code of the Russian Federation state that all monetary remuneration accrued to employees is included in labor costs. This reduces the amount of income tax (for organizations using the OSNO) or the single tax (for organizations using the simplified tax system). To avoid misunderstandings with the tax office, keep documents confirming your right to a tax reduction. Everything related to the premium and its inclusion in costs must be regulated by regulations:

• In the employment contract, specify the conditions for calculating remuneration. It is prohibited to deduct incentive amounts from income tax if this condition is not met (Article 270 of the Tax Code of the Russian Federation).
• Any organization must have a “Regulation on employee bonuses”.

Bonus for losses

Article 2 of the Civil Code of the Russian Federation directly states that entrepreneurial activity is an independent activity carried out at one’s own risk, aimed at systematically obtaining profit from the use of property, the sale of goods, the performance of work or the provision of services.

If there is a profit, then the management does not have a question about whether to pay or not pay an annual bonus. What to do if at the end of the year the company found itself without profit or even at a loss?

This sad fact is not an absolute basis for a complete refusal to pay annual bonuses to employees, who, perhaps, saved the organization from the worst case scenario. But the production nature of such payments alone is not enough, because the second criterion for the validity of expenses is their documentation in accordance with the requirements of the law (Article 252 of the Tax Code of the Russian Federation), which is what tax inspectors primarily pay attention to. Therefore, the bonus regulations should include various indicators, in addition to profitability: the quality of the work performed, the absence of complaints from partners, buyers, recipients of services, and regulatory authorities. These indicators can be met even in the absence of profit. Accordingly, the order must contain an assessment of the feasibility and validity of paying an annual bonus in order to be able to recognize expenses when calculating income tax, and as a result, more modest amounts of bonuses compared to profitable years.

Assignment of bonuses

The procedure for calculating bonuses in a company is usually prescribed in the Regulations on bonuses and the collective agreement. The following types of payments are distinguished:

• depending on performance indicators;
• not related to work results.

The first are included in the wage system, and most often are regular. The latter are assigned from case to case, and are mainly issued at the expense of net profit. Anniversary bonuses for employees or the company are payments that do not depend on performance results. Read more about the types of awards here.

Accrual is made based on the order of the manager. The order indicates the reason for the payment and the list of those who will receive it.

Example of an order

LLC "Trading"

February 10, 2021

“Guided by Articles 22, 129, 132, 191 of the Labor Code of the Russian Federation, the Regulations on bonus payments to employees, taking into account the unprofitability of the Company’s activities for 2015 due to a decrease in production volumes, but noting the high quality of work and the personal labor contribution of each employee of the Company to minimize the resulting loss

I ORDER

pay a bonus to the employees of Trading LLC based on the results of work for 2015 in the following amounts:

…»

With this wording of the order, the risk of recognizing the costs of paying bonuses as not meeting the criterion of economic justification and being unlawfully taken into account when calculating income tax is reduced (clause 1 of Article 252 of the Tax Code of the Russian Federation).

Personal income tax and insurance premiums

The annual bonus is always included in the tax base for personal income tax (subclause 6, clause 1, article 208 of the Tax Code of the Russian Federation).

The Ministry of Finance, in letter dated September 29, 2014 No. 03-04-06/48497, answered the question about the personal income tax taxation of the annual bonus paid to an employee upon dismissal. Officials explained that the annual bonus is not a compensation payment made to employees of an organization upon dismissal, therefore it is subject to personal income tax in the prescribed manner.

The object of taxation with insurance premiums is payments and other remuneration accrued in favor of individuals within the framework of labor relations (Clause 1, Article 7 of the Federal Law of July 24, 2009 No. 212-FZ “On Insurance Contributions...”). These payments must also include contributions for insurance against accidents and occupational diseases (Clause 1, Article 20.1 of the Federal Law of July 24, 1998 No. 125-FZ “On compulsory social insurance against accidents at work and occupational diseases”). If a bonus is awarded to a dismissed employee, insurance premiums are also paid from it, because this remuneration was made during the period of time when this employee was still in an employment relationship with the organization (letter of the Ministry of Labor of Russia dated September 2, 2013 No. 17-3/1450).

Is it necessary to draw up a bonus clause or a collective agreement?

Nobody bothers you to pay a bonus without a collective agreement or Regulations. But the employer is at risk. Art. 252 of the Tax Code of the Russian Federation establishes that all expenses, including bonuses, must be documented, in which case they can be accepted to reduce the income tax base.

When checking, a Federal Tax Service employee may not agree to include the bonus as an expense if he does not see it either in the labor agreement, in the collective agreement, or in the Regulations on Bonuses.

Therefore, write down the bonus procedure and amount of remuneration in one of three documents.

• Employment contract - if you fix the bonus in this document, you will be obliged to pay it, otherwise the employee has the right to go to court. The size and order of bonuses can be changed only by mutual agreement.
• A collective agreement is a multilateral agreement and is even more difficult to change.
• The bonus clause is signed by the employer, so it is easy to make changes to it.

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