What deductions must or can be taken from the one-time retention bonus payment? Is it retirement eligible?
• Taxes are deducted from the bonus payment. Agencies should consider reminding employees that the bonus payment is not regular wages and therefore will be withheld at the supplemental rate. • Retirement deductions should not be taken from one-time retention bonus payments paid to employees covered by the Employees Retirement System (ERS) or the Teacher Retirement System (TRS). • Deferred compensation may be deducted from the one-time retention bonus payments if the employee authorizes the deduction, and he or she has not reached the maximum amount which may be deducted. • Retention payments may be subject to withholding for child support arrearages if the employee has an administrative writ of withholding from the Office of the Attorney General (OAG). Employers may not make a lump sum payment to an employee in an amount of $500 or more without first notifying the OAG to determine how much should be applied to child support arrearages. [TFC § 158.215].
Related Questions
- Employees of the legislative agencies are considered unclassified employees. Do they qualify for the one-time retention bonus payment?
- Is the one-time retention bonus payment of $800 pro-rated for part-time and hourly employees?
- Are part-time and hourly employees eligible for the one-time retention bonus payment?
