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How to Withhold on Supplemental Wages Over $1 Million

Author: Alice Gilman

Employees often receive payments in additional to their regular wages - bonuses, for example. These additional payments are called supplemental wages. Under IRS rules, wages that vary from pay period to pay period (e.g., overtime, commissions, bonuses and reported tips) are always treated as supplemental wages. In addition to bonuses, overtime, commissions, and reported tips, supplemental wages include the following payments: