IRS Publication 15
Authoritative Statutory Source
Supplemental Wage Tax Withholding (22%)
Flat 22% federal tax withholding rate applied to bonuses, commissions, and severance payments.
Detailed Definition & Statutory Context
Supplemental Wage Tax Withholding (22%) is governed by IRS Publication 15 standards across corporate payroll administration, statutory tax withholding, and general ledger labor accounting. Rigorous compliance with Supplemental Wage Tax Withholding (22%) prevents IRS Form 941 deposit penalties and FLSA wage-and-hour litigation.
Statutory Formula & Equation
Supplemental Tax = Bonus Amount × 22% Flat Federal Withholding Rate
General Ledger / Payroll Journal Entry Standard
Debit: Gross Payroll Expense / Employer Tax Expense
Credit: FICA Taxes Payable / Federal Income Tax Payable / Net Pay Cash
Credit: FICA Taxes Payable / Federal Income Tax Payable / Net Pay Cash
Common Operational Pitfalls
- Excluding non-discretionary bonuses from FLSA overtime regular-rate calculations.
- Failing to cap Social Security tax withholding once employee earnings exceed the $168,600 wage base.
- Misclassifying non-exempt hourly employees as exempt salaried workers.