Bonus — Payroll Definition

Bonus paystub meaning: A one-time or periodic additional payment, often taxed at a flat 22% federal supplemental rate. Codes: BONUS.

A one-time or periodic additional payment, often taxed at a flat 22% federal supplemental rate.

Bonuses are supplemental wages paid in addition to regular compensation. The IRS treats bonuses as supplemental income, which can be withheld at a flat 22% federal rate (37% for amounts over $1 million) OR using the aggregate method (adding the bonus to regular wages and calculating withholding on the total). Many employees are surprised to see a large tax bite on their bonus check — this is normal and usually evens out when filing taxes.

Earnings lines should identify the applicable rate, hours or units, current amount, and year-to-date total. Reconcile them with time records, the pay period, the employment agreement, and the employer-issued statement.

When this term appears on a statement, read its label, current amount, year-to-date amount, pay-period context, and any adjacent rate or hours together. Resolve a mismatch with the original issuer or the cited authority rather than changing a record to force a preferred result.