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<blockquote data-quote="McFeely" data-source="post: 3365535" data-attributes="member: 60776">Mostly correct...the IRS considers a bonus &quot;supplemental wages&quot; and withholds 25% for tax purposes at the time the bonus is given. The IRS isn&#039;t exactly thinking your bonus x 52 weeks is your new yearly pay per se, but it does withhold 25% on that part of that check.At the end of the year, you are correct. Your tax bill due is based off your entire year of earnings from FedEx (I&#039;m just keeping this simple with one job for the sake of clarification). So if you made $49,000 in hourly pay + $1,000 in a bonus, your tax bill would be based off of a $50k income. That tax bill due would be the same as if you had earned $50k in hourly pay alone.The worst part of the 25% tax on supplemental wages is when you get laid off from a job and get a fat severance check. You lose your job, but YAY you have a severance check to get by...however it&#039;s been cut down by a huge amount and you most likely reeeeeeally need that money since you just lost your job. It happened to me.</blockquote>

[QUOTE="McFeely, post: 3365535, member: 60776"] Mostly correct...the IRS considers a bonus "supplemental wages" and withholds 25% for tax purposes at the time the bonus is given. The IRS isn't exactly thinking your bonus x 52 weeks is your new yearly pay per se, but it does withhold 25% on that part of that check. At the end of the year, you are correct. Your tax bill due is based off your entire year of earnings from FedEx (I'm just keeping this simple with one job for the sake of clarification). So if you made $49,000 in hourly pay + $1,000 in a bonus, your tax bill would be based off of a $50k income. That tax bill due would be the same as if you had earned $50k in hourly pay alone. The worst part of the 25% tax on supplemental wages is when you get laid off from a job and get a fat severance check. You lose your job, but YAY you have a severance check to get by...however it's been cut down by a huge amount and you most likely [I]reeeeeeally[/I] need that money since you just lost your job. It happened to me. [/QUOTE]

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