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Income Tax amount for a bounus

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A

alfam05

Guest
Instead of paying a shift premium my employer pays its employees a quarterly bonus due to the shift worked is the midnight shift. I just started working this shift and am getting ready to recieve this bonus. I was advised that this is taxed at 41%. Is this right and is that legal? I live in MI.
 


L

loku

Guest
Withholding on bonus.

The employer can figure withholding on bonuses using the same method used for your regular wages. If these payments are identified separately from regular wages, your employer may withhold income tax from these wages at a flat rate of 28%. An additional amount is withheld for social security at 6.2%. That makes a total of 34.2% withheld for federal purposes. The employer should also withhold an amount for state income tax purposes; therefore, the 41% could be correct.

However, you are not taxed at those rates. They only determine the withholding. Your bonus money will be added to your other earnings, and the total will determine the tax rate.
 

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