Bonus — Payroll Definition
A one-time or periodic additional payment, often taxed at a flat 22% federal supplemental rate.
A one-time or periodic additional payment, often taxed at a flat 22% federal supplemental rate.
Bonuses are supplemental wages paid in addition to regular compensation. The IRS treats bonuses as supplemental income, which can be withheld at a flat 22% federal rate (37% for amounts over $1 million) OR using the aggregate method (adding the bonus to regular wages and calculating withholding on the total). Many employees are surprised to see a large tax bite on their bonus check — this is normal and usually evens out when filing taxes.
Common pay stub code: BONUS