@m6 you make too much. Surprised you haven’t been let go.
15 replies (most recent on top)
I am very surprised by how many people don't understand how tax works, even while working for a finance company.
@m6 176K taxed at 22% federal and less than 10% for any state. It's impossible that you get taxed at 50%.
@bt not 15% ! More like 50% for me ! 29 yrs of service. Performance rating 4.5. $176K per year
@jh is correct but it will all balance out when you file your taxes next year.
The key thing to remember is that the amount withheld is just an estimate or prepayment of your taxes. When you file your annual tax return, your total yearly income (salary plus bonus) is all reported together in Box 1 of your Form W-2 and taxed at your actual, correct tax rate.
If more tax was withheld from your paychecks and bonus than you actually owe for the year, you will receive a tax refund.
If too little was withheld, you will have a tax bill.
Bonus are taxed the same rate as your normal salary. Just because it's considered "extra" so you might look at marginal tax rate. For those who got 45-50% tax rate on bonus, you must have a very good pay. Withhold doesn't matter because in April, you will get it back if withhold is more than it should be.
The federal tax rate for bonuses (considered supplemental income) is 22%, then you add whatever you state and local tax rates are. Most state rates are the same whether it's a bonus or regular income but there are exceptions. Of course you still have social security tax and Medicare tax.
@gm where did you come from? Not to be rude but by "where" I mean what country.
US Bonuses are usually taxed higher since it's a larger than payroll and a lump sum - like most things even winning lottery taking all at once.
Every role I've had in corporate America the last 25 years, if my bonus was over whatever my monthly income was it was taxed between 35 and 50%.
New here. I never understood why people say bonuses are taxed 45-50%. At my previous jobs, my bonus was always taxed based on my withholding which is never 40-50%. Are things done differently here?
@dn How much will "T"'s bonus be ?
The duration of this process is always impressive. After calibrations are done, it’s just a math equation with percentages. Maybe after we learn how to program an in office average calculation, we can move onto this.
@at 15% of base pay.
You better save your bonus.
AI is definitely going to replace you.
Performance review is mid to end of January. Depending on your manager when you’ll have that. And you’ll know the amount of your bonus middle of February, and the amount you’ll get will depend on your performance from 2025. And payout should be end of February or first day of March. Do expect 45-50% of taxes on your bonus. Depending which state you’re in.
Bonuses are paid out the last business day of February (the 27th this year) and your direct manager will let you know the amount around Feb 15th. It’s been that way for the last 20+ years. Did you just start working here?