Tax on Bonuses and Commissions
When some bonuses or commissions are paid to employees, they are relevant to a number of payroll periods, and because of this they can have the tax calculated for them spread over this same number of periods. This reduces the amount of tax that the employee has to pay on the bonus.
To be able to spread the tax for a bonus payment across a number of pay periods, the bonus must be paid against a wage type that is set up for marginal (bonus) tax.
When paying a bonus payment where the tax is to be spread across more than one period, the bonus payment must be entered into infotype 0014 (Recurring benefits and deductions). The number of periods across which to spread the tax is entered in the Interval field.
The from and to dates of the infotype must correspond with the date of the payroll period in which you wish to pay the bonus. If the date goes across more than one period then the payment can end up being paid more than once.
Creating a Bonus Payment with Marginal Tax