Difference between revisions of "Calculate Tax on Bonus Payments"
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Employers give bonuses to employees for various reasons. Perhaps it’s a one-time reward for a job well done. Or it may be a payment made at regular intervals, based on company performance. Whatever the reason, bonuses are considered supplemental income by the IRS. As such, they are subject to special withholding rules.<ref name="rf1">http://finance.zacks.com/percentage-income-tax-deducted-bonus-checks-2960.html</ref> Your employer has options, both as to the method of paying your bonus, and how to calculate withholding. Which options are chosen can have an impact on how much of your bonus you’ll actually take home. | Employers give bonuses to employees for various reasons. Perhaps it’s a one-time reward for a job well done. Or it may be a payment made at regular intervals, based on company performance. Whatever the reason, bonuses are considered supplemental income by the IRS. As such, they are subject to special withholding rules.<ref name="rf1">http://finance.zacks.com/percentage-income-tax-deducted-bonus-checks-2960.html</ref> Your employer has options, both as to the method of paying your bonus, and how to calculate withholding. Which options are chosen can have an impact on how much of your bonus you’ll actually take home. | ||
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== Steps == | == Steps == | ||
=== Determining How Your Bonus Will Be Paid === | === Determining How Your Bonus Will Be Paid === | ||
