Key Points in Determining and Calculating Bonus Income
- Look for bonus income on paystubs (in current pay period or year to date (YTD). It may or may be not labeled “bonus”. It may be listed as “incentive”, “other” or a company term like “MyShare”, etc.
- Determine what kind of bonus it is, and if it can reasonably expected to recur during the certification period. Ask the client, and also look for indications that it was previously received (other paystubs in imaging, YTD greater than previous checks or current bonus amount, case notes). Verify with client or employer, and document what is reported in case notes.
- Determine how often the bonus can be received and calculate the anticipated monthly amount. Verify with the client or employer, and document what is reported in case notes.
- If the bonus can be received on each check, just include the bonus in the gross amount used for MICAL (as we do, for example, with overtime pay that recurs).
- If the bonus is received periodically, subtract the bonus from the gross before calculating regular wages. Next, divide the bonus YTD by the bonus period covered, and add as a 2nd employer in MICAL. E.g.
- Annual bonus – divide by 12.
- Quarterly bonus – divide by the number of months in the quarters for which client would have received income to date. For example, if you have the client’s July checks and the client has an established pattern of receiving the bonus, the YTD on the last July check would cover 2 quarters (i.e. 6 months) and be divided by 6 (Jan through June) rather than 7 months.
- If the bonus is received at a different frequency than the regular pay (bi-weekly pay vs. monthly bonus) and there is bonus pay on a provided check, subtract the bonus from the gross for that check, calculate the correct anticipated monthly bonus, and add as a 2nd employer in MICAL. If you include a monthly bonus in a bi-weekly pay calculation, you will count too much income for the client.
** Case Note: Case notes MUST document the type of bonus, if the bonus is likely to recur, how often it can be received, if it is being included and how it is being calculated. There will be times when the bonus type and frequency of the bonus will need to be clarified by the client and/or employer**
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