Join the waitlist

Bonus Accrual RecomputePercent of Income Before or After Bonus

What do these figures come to once the work is shown?

Bonus pool as a percent of income before the bonus, or after it with the circular formula solved, against the recorded accrual.

  • Runs in your browser
  • Nothing stored or sent
  • Free, no sign-up
Your figures
Example figuresIllustrative only. Type over them with your own.
Break (recorded less recomputed)
$18,182
Recorded bonus less the recompute
Recomputed bonus
$381,818
Recorded amount
$400,000
Drawn to one scale
Recomputed bonus$381,818
Recorded amount$400,000
Break (recorded less recomputed)$18,182
Income after bonus$3,818,182
All results
MeasureResult
Recomputed bonus$381,818
Recorded amount$400,000
Break (recorded less recomputed)
Recorded is higher
$18,182
Income after bonus$3,818,182
How this was worked out
Work shownrecomputed as you type
Before the bonus: bonus = rate x income
After the bonus: bonus = rate x (income - bonus), so bonus = rate x income / (1 + rate)

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Before the bonus: bonus = rate x income
  • After the bonus: bonus = rate x (income - bonus), so bonus = rate x income / (1 + rate)

How it works

Bonus plans tied to profit define the base precisely: before or after the bonus itself, and sometimes after income tax. When the base is income after the bonus, the bonus appears on both sides of the equation, and solving it gives rate x income / (1 + rate).

Read the plan for caps, thresholds and the income measure used, which is often adjusted for items such as gains on sales. Recompute from the audited income figure and adjust the accrual when audit adjustments change income.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What if the bonus is after income tax as well?

Then bonus = rate x (income - bonus - tax), and tax also depends on the bonus. Solve it with the tax rate in a spreadsheet.

Do audit adjustments change the bonus?

Yes, when the plan is formula based. An adjustment to income flows through to the bonus.

Is a discretionary bonus accrued?

When there is a present obligation, such as a past practice of paying, and the amount can be estimated.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

Related audit calculators

CalculatorFixed Asset Disposal Gain or Loss RecomputeGain or loss from proceeds less selling costs and net book value at disposal, compared with the gain or loss recorded.CalculatorInterim to Year-End Rollforward Calculator (AU-C 330 Remaining Period)Roll a balance tested at an interim date to period end with the activity in the remaining period, and size that activity against the year-end balance.CalculatorDividends Declared Recompute: Shares Outstanding x Dividend per ShareDividends from shares issued less treasury shares, the dividend per share and the number of declarations, against dividends recorded.
For US CPA firms

Join the CORAA waitlist

CORAA AI drafts audit working papers from your client’s QuickBooks books and does the first pass: lead schedules, tie-out, memos, draft notes and letters. CORAA Network reviewers clear every finding. Your firm reviews and signs.

  • First audit free, so you can judge the quality on a real file
  • Flat fee by entity size; messy books included
  • We work only with CPA firms, never their clients
See how it works →

* required