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    colleenhasbrouc's Avatar
    colleenhasbrouc Posts: 1, Reputation: 1
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    #1

    Apr 2, 2008, 11:45 PM
    Taxes on bonuses
    The employees where I work each received a $400 bonus in the form of an am ex gift card. We then received a memo that the employer was withholding $150 from our next pay check to cover the 'gift tax withholding taxes' This is approximately 38%! I read that 25% is the max or the bonus amount should be added to the current wages and taxed accordingly.(IRS Pub 15) Can the employer do this?
    tgrabler's Avatar
    tgrabler Posts: 2, Reputation: 1
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    #2

    Apr 3, 2008, 05:03 AM
    What state do you live in? The tax is 25% for federal and 6.2% for Social Security and 1.45% for Medicare. If you live in a taxable state or have any local or SDI taxes those also apply.
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