Nervous about end-of-year bonuses, overtime, and payroll taxes? Many employers reward and recognize high performers with a bonus, especially toward the end of the year. If you award bonuses, there are several overtime and tax rules to consider. Here’s an overview of some of these rules to help you as you close out the business
Beware Taxes on Bonuses
The IRS considers bonuses a form of wages, and as such, they’re subject to federal taxes, just like your normal pay. However, it’s not just federal tax you have to consider. You might be subject to Medicare and Social Security tax, and unemployment tax. Depending on where you live, you may also have to pay
