Expert: Shirley McAllister, CPP, PHR - 4/7/2009

Question
after you  work a shift from  9 to 5  monday though friday an u are asked by the employer to tavel after hours,  should the  money  from that trip be on the same check as the monday through friday 9 to 5 of a seprate check  that is tax free because of the timke spent  after scheduled hours?

Answer
No money paid to an employee is tax free it does not happen.

It can be done either way and it is at the option of the company which way they choose.

They can add it to the regular check and tax it as a regular lump sum with the regular check.

They can cut two checks. The regular check will be taxed as normal.
The supplemental check will be taxed at the higher supplemental rate which is 25% federal, 7.65% fica/medicare and whatever the supplemental state rate is. It usually runs about 40% or more to tax at a supplemental rate which is why most companies add it to the regular check.

Shirley