Expert: Shirley McAllister, CPP, PHR - 8/4/2009

Question
I am working a job where I get a salary and get paid $3400 every two weeks (Bi-weekly).  I started the last week in April 2009, and I'm finished in January of 2010.  I landed this job for my company, and I am getting a $15,000 bonus when the job is completed.  Just wanted to know what I can be looking forward to as the take home pay for this $15,000 bonus.  My home state is Indiana, I'm married and taking a 0 dependant rate on state withholding and a 1.4% county rate.  Thank-you.

Answer
Bonus checks are not calculated on your W-4 form or your deductions. They are calculated on the supplemental tax rate because they are a supplemental wage.

The Federal rate is 25% on supplemental wages , the Fica/medicare is the same at 7.65% and the supplemental rate for Illinois is 3%.

So you have 25% + 7.65% + 3% which is 35.65%

You take 15,000 X 35.65% and the tax is 5,347.50

15,000 X 25% is      3750.00 federal income tax
15,000 X 7.65% is    1147.50 Fica/Medicare
15,000 x 3%    is     450.00 Indiana State Tax
--------------------------------------------
Total Tax is         5347.50

Total Bonus is 15,000.00
Total Tax      (5,347.50)
----------------------------
Net Bonus       9,652.50

Unless you have 401K taken out of your bonus check in which case you would have to now subtract the 401K.

Shirley