Hi Sir, we have one payment but would like to find out if we as employer have been classified it correctly in payroll process.
This payment is for sign-on bonus with the purpose to attract new hire whether is internally transfer or newly hired. The purpose is for the new hire accepting the job offer and joining the company whether is internal transfer internally or externally.
However, this payment will be paid to employees with 24 months installment and will stop paying upon employee resignation, or after 2 years.
Question:
- if we are making 24th Months installment payment to employee. will there be any issue for us to name this payment as "Sign-On Bonus". Since the nature of the payment serve the same to attract new hire or internal transfer.
- Or we should classified the payment as allowance instead? but this payment is serving one time off. After the lock 2 years, employees will no longer receive the payment.
- or should we named it under "Other Bonus" for this nature of payment?
- How do we report this sign on bonus to ATO in payroll system?
Just would like to check if sign-on bonus has any criteria to meet for us to named it or just purely based on the nature of the purpose and not the method of payment to employees. ie, if sign-on bonus should only release to employees within < 6 month or 24 months, if more than that duration should be classified as allowance etc.
Looking forward to your response by tomorrow urgently. Thanks in advance.
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