Supplemental Pay Definition
Supplemental pay is compensation that is other than an employee’s regular wages or salary. Examples include bonuses and tips.
Supplemental Pay Extended Definition
Supplemental pay is additional money an employee can receive in addition to their regular wages, such as:
- Cashed-out vacation or sick time
- Retroactive pay raises
Employers need to know the proper amount of income taxes to withhold from supplemental wages, which will depend on the nature of the supplemental pay. There is a flat supplemental tax rate of 22% that employers may be able to use for withholding.
What You Need to Know About Supplemental Wages
Last Updated By
Rachel Blakely-Gray | May 01, 2023