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Accounting, Payroll & Pension Issues/Bonus Taxes
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Question
We are lucky enough to receive a bonus this January. It will be added to a regular paycheck & we are given the choice to elect the method of tax: Aggregate Method (Spread tax - will be paid with regular earnings) or Supplemental Rate (FIT=25% + SIT/State Supplemental Rate - will be paid as separate earnings). We are getting conflicting information, which one is the better choice?
It could be different with different employees and different circumstances. If you have a family and have many deductions it would probably be to your advantage to go with the aggregate method as it uses the deduction tables. If you are single most likely the supplemental method will be to your advantage.
Shirley
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| Comment | Thanks so much for your timely response, i know it was a general question that could have many variables so I appreciate it! | ||
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Answers by Expert:
Shirley McAllister, CPP, PHR
Expertise
I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.
Experience
25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.
Organizations
SHRM, APA, I.O.M.A.
Publications
I.O.M.A. and BNA
Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration.
Boise State University Human Resource Certification
Awards and Honors
APA Hotline Citation of Merit for last 8 years.
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