Payment of State Employee Incentive Bonus Program Awards

It is the policy of the State of North Carolina to comply with all applicable federal and state regulations regarding the payment of State Employee Incentive Bonus Program (SEIBP) awards.

State Budget Manual - Fiscal Policies and Regulations Section

Office of State Personnel - Employee Recognition Programs

North Carolina General Statute §143-340 (1), §143-345.20 - §143-345.25

State entities implementing an employee suggestion awards program shall be responsible for payment of cash awards. Employee awards are approved through the Office of State Personnel. Once approved, the Office of State Budget establishes funding for the payment of the awards.  Documentation from the OSP and OSBM must be submitted to the agency Payroll Office for processing the payments. 

The amount of the award is subject to Social Security tax, as well as federal and state income tax but is not subject to retirement withholdings. 

Awards must be paid with the employee's next regular payroll and is taxed according to the employee's withholding exemptions. If the employee award is paid on a payroll other than the employee's regular payroll, then the payment is taxed at the flat tax rate indicated in section D.02 Current Year Payroll Processing Rate Table.

Employee awards must be coded to 531611, Suggestion System Awards.

This policy applies to all State entities.

There are no exceptions to this policy.

There are no special terms for this policy.