Christmas bonus - taxes

[IGotWorms 3,302]

 

He is talking about what is withheld from his paycheck which is higher for bonuses than regular pay. Many people have a hard time differentiating from what is withheld and what you ultimately pay in taxes.

I dont think my withholdings are different, but they should be since obviously all of that income is going to be taxed in your highest bracket

[supermike80 1,285]

Was just in the elevator with a chick from the office who was b1tching that her bonus was pro-rated for maternity leave.

 

that's completely sh1tty

Seriously??? Wow. Can that even be legal???

[Gladiators 1,904]

Was just in the elevator with a chick from the office who was b1tching that her bonus was pro-rated for maternity leave.

 

that's completely sh1tty

 

That's a tough one. For us, bonuses are discretionary. If someone goes on maternity leave, we don't dock them on the bonus. We give those that had to pick up the slack more. But I could see the justification in reducing someone's bonus if they were gone for 1/4 of the year. Just my $.02 based on a discretionary (non-formula driven) setup.

[IGotWorms 3,302]

 

That's a tough one. For us, bonuses are discretionary. If someone goes on maternity leave, we don't dock them on the bonus. We give those that had to pick up the slack more. But I could see the justification in reducing someone's bonus if they were gone for 1/4 of the year. Just my $.02 based on a discretionary (non-formula driven) setup.

Just depends on how you look at it.

 

That person was gone for 1/3 or 1/4 of the year so why should they get a full bonus? Or any bonus at all?

 

However that person just had a child and probably wasnt on paid leave the whole time so they could use the $$$ more than anyone. Good time to step up and show you take care of your employees.

 

[Patriotsfatboy1 1,432]

I dont think my withholdings are different, but they should be since obviously all of that income is going to be taxed in your highest bracket

 

Well, it is typically treated as supplemental income (similar to commissions). Most employers will be using a flat rate for that withholding (I think it is 25%) and it does not matter what you claim for dependents, so it typically means that a higher percentage of that bonus is being withheld from your paycheck.

 

Remember, even if you are in the highest tax bracket, your effective tax rate is almost always going to be less than 25%.

[Bert 1,087]

Seriously??? Wow. Can that even be legal???

She wasn't at work contributing why should she get a bonus. She already received free vacation for having the damn kid she sure shouldn't get to take even more from the people having to work harder while she is gone.

[Patriotsfatboy1 1,432]

Seriously??? Wow. Can that even be legal???

 

She should have swallowed.

[edjr 5,547]

Seriously??? Wow. Can that even be legal???

 

She is a Lawyer, talk about irony

 

(yes, of course it's legal)

[Gladiators 1,904]

 

Well, it is typically treated as supplemental income (similar to commissions). Most employers will be using a flat rate for that withholding (I think it is 25%) and it does not matter what you claim for dependents, so it typically means that a higher percentage of that bonus is being withheld from your paycheck.

 

Remember, even if you are in the highest tax bracket, your effective tax rate is almost always going to be less than 25%.

 

We use 25% as the standard, but based on the bonus, we'll adjust it. Bonuses between $100k - $150k, I'd use 27%. $151k - $200k, I'd use 30%. Highest we go is 40%. This is just federal.

 

Paying taxes sucks, but it means we're making money.

[Patriotsfatboy1 1,432]

 

We use 25% as the standard, but based on the bonus, we'll adjust it. Bonuses between $100k - $150k, I'd use 27%. $151k - $200k, I'd use 30%. Highest we go is 40%. This is just federal.

 

Paying taxes sucks, but it means we're making money.

 

Who is "we"? Are you talking about, as an employer, you use a different withholding amount for Federal taxes for supplemental income? If so, why?

 

For us, we are doing what the federal government requires us to do and we let our employees plan out their own tax situations. We may offer guidance, but we only do what is required since it is not our money at that point.

 

The highest the Federal government goes is 39.6% and that is only for amounts over $1M. First $1M is at 25% and remaining amounts are at 39.6%.

[Bert 1,087]

 

Who is "we"? Are you talking about, as an employer, you use a different withholding amount for Federal taxes for supplemental income? If so, why?

 

For us, we are doing what the federal government requires us to do and we let our employees plan out their own tax situations. We may offer guidance, but we only do what is required since it is not our money at that point.

 

The highest the Federal government goes is 39.6% and that is only for amounts over $1M. First $1M is at 25% and remaining amounts are at 39.6%.

[Gladiators 1,904]

 

Who is "we"? Are you talking about, as an employer, you use a different withholding amount for Federal taxes for supplemental income? If so, why?

 

For us, we are doing what the federal government requires us to do and we let our employees plan out their own tax situations. We may offer guidance, but we only do what is required since it is not our money at that point.

 

The highest the Federal government goes is 39.6% and that is only for amounts over $1M. First $1M is at 25% and remaining amounts are at 39.6%.

 

Yes, as the employer. We only have 5-10 employees at $100k+. They're the same every year. Many years ago (before my time) we had employees with bonuses over $100k complain about having to pay in at tax time, so we adjusted the %'s and let them know. All has been good since then.

[Bert 1,087]

 

Yes, as the employer. We only have 5-10 employees at $100k+. They're the same every year. Many years ago (before my time) we had employees with bonuses over $100k complain about having to pay in at tax time, so we adjusted the %'s and let them know. All has been good since then.

Unless they are facing under reporting penalties I don't understand why they wouldn't want to hold onto the cash until April 15th. To each his own I guess.

[mmmmm...beer 691]

3,547.00 award

 

Netted about 2k so essentially 1,550 in taxes

[penultimatestraw 473]

At the end of the day, it all works out the same.

This. Whining about taxes is like complaining about the weather. You aren’t gonna change it unless you move.

[jerryskids 5,172]

 

Yes, as the employer. We only have 5-10 employees at $100k+. They're the same every year. Many years ago (before my time) we had employees with bonuses over $100k complain about having to pay in at tax time, so we adjusted the %'s and let them know. All has been good since then.

 

What do you do for a living?