Supplemental wages
In accounting, supplemental wages means pay that isn't regular wages — bonuses, commissions, overtime, severance, back pay. Federal income tax on it may be withheld at a flat 22% for 2026, and must be at 37% on an employee's supplemental wages over $1 million in the year.
Authority: IRS Pub. 15 (2026), §7 (opens in a new tab). Sources
The lesson that teaches this
From the free founder back-office course, taught on one company's books, with exercises to work it yourself.
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- bonus tax
Also in Payroll
Defined in Lexicon. This page is generated from that document, so the two can't disagree.