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This question is about average bonus statistics.
Do bonuses have to be paid by March 15?
No, bonuses do not have to be paid by March 15. Companies can pay bonuses whenever they like, but many choose to set March 15 as the deadline for tax reasons.
Many companies can deduct bonuses on their tax returns as long as they pay them within two and a half months after the tax year ends.
So, if a company wants to deduct bonuses it has paid from its tax year that ended December 31, 2020, it has until March 15, 2021, to pay them and still be able to list them as deductions on their 2020 tax return.
Usually, the companies that take advantage of this policy are the ones that calculate their bonus pay budget based on the organization's calendar year performance. This means the company won't know how much they can give their workers in bonuses until it calculates how much it's earned through December 31.
Being able to pay those bonuses up until March 15 gives their accountants and managers time to figure out how much each person gets and add it to their paychecks while still giving the company the tax benefits of providing bonus pay.
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