What if someone get the bonus every month and it is not the same amount, for example 400-600 dollar. Is it still 25% flat tax? If that's the case than after all the deduction for a 600 dollar bonus you don't get 350+/-.. You see 250-/+ tax for 600 dollar, outrages don't you think. I think it is individuals responsibility to do the yearly adjustment for taxes, not monthly and of course not the payroll department.

What have you filed with your employer by means of exemptions? File for fewer exemptions and get more money in your pocket with every check.

How would you like your bonus to be taxed?

25% is the standard withholding rate for bonuses (assuming that the bonus is identified separately from your regular pay). This is not something dreamt up by the payroll department, but is mandated by the IRS.

So I will assume the "bonus" check is not part of the regular check, more often, ( at least for those I know of) the bonus is merely added to the regular pay check and taxed as such.

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Originally Posted by JudyKayTee

What have you filed with your employer by means of exemptions? File for fewer exemptions and get more money in your pocket with every check

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Not true - this applies only to regular wages, not "supplemental" wages like bonuses. The withholding on supplemental wages is a flat 25% regardless of what the W4 claims for allowances.

Sorry - in MY case my bonus is figured into the first check of the following month. It's not a separate check. I didn't see a mention of how the OP is paid - separate check or not.

Even if paid in the same check, as long as the bonus amount is identified separately from regular pay the 25% withholding still applies. The only way to avoid it is your employer pays you a lump sum without identifying either the regular wage or supplemental wage amount - under that condition then withholding for each pay check is calculated using the regular withholding methods as if every pay check will be that amount. See section 7, "Supplemental Wages," starting on page 15: http://www.irs.gov/pub/irs-pdf/p15.pdf

Whether you receive a bonus monthly or yearly, it is a flat rate of 25% from the bonus amount.

Exemptions are only used with regular salary not on bonus or commissions etc. Bonus checks are separate from what was worked in the pay period. Flat rate does not change.

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Originally Posted by Bri1995

Exemptions are only used with regular salary not on bonus or commissions etc. Bonus checks are separate from what was worked in the pay period. Flat rate does not change.

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AGAIN - I saw no indication from OP that it's a separate bonus check. MY bonus check is paid as salary as I have stated before.

I stand corrected. Apparently my bonus SHOULD be separate from what I worked in a pay period, not included as salary. I didn't realize there cannot be exceptions (such as my situation).