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Commission Taxes

I am trying to understand the difference between the 25% and 22% tax withholding for commissions paid out. It seems every other article uses 22% or 25% for supplemental wages. I am a W-2 employee with a base salary + commissions. My commissions come on the same round of payroll as my base pay but with their own pay stub and my overall YTD is broken out so commissions/"incentives" stand alone. I understand SS, medicare, and state tax are fixed (I live in Utah), but what should I be using for my federal withholdings? 22% or 25%?

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1 Reply

Commission Taxes

Not sure what you mean by "what should I be using?"    Typically, commissions or bonuses have a higher amount of tax withheld from the paycheck you receive, but when you enter it all onto your tax return, the amount of your income and the amount of tax withheld will be reconciled, and your tax due or refund will be calculated on the amounts you entered.      What are you trying to do?   

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
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