March 14, 2008

Tough Questions

Featured Image

Kristin Torrey, left, and Ashlie Weeks, volunteers from the Junior League of Nashville, take pledges during last week's Radiothon. (photo by Dana Johnson)

Our VUMC year-end success sharing bonus is added to our paychecks. Why can’t we get our bonus in a separate check, so that taxes, retirement, etc., would not be deducted?

Either way it's paid out, the deductions work out to be the same.

Regardless of whether the amount is added to a regular paycheck or paid separately, Vanderbilt does not deduct employee retirement savings contributions from year end success sharing bonus payments.

Conversely, income tax regulations require employers to deduct taxes from bonus payments, regardless of whether the bonus is added to a paycheck or paid separately.

We've learned that some people will misplace checks.

Believe it or not, when bonus payments are issued as separate checks, some employees lose them or forget to cash them.

For bonus payments, we've learned that it's more costly and less efficient to send out separate checks than to add these payments to regular paychecks.

Again, all deductions are unaffected by the method of payment.

— Stephen Warren, senior director, Human Resources Operations