Bonuses paid to staff are taxable. How this is done depends on the type of bonus.
There are separate calculations for working out tax on lump sum payments from primary and secondary employments.
Redundancy and retiring payment are taxed at lump sum rates, but are not liable for ACC earners' levy.
Bonuses paid regularly are taxed by adding the bonus amount to the employee's gross wages for the pay periods in which they were earned.
Restrictive covenant and exit inducement payments are classed as source deduction payments, so PAYE must be deducted at the lump sum rate.