2026 · IRS Pub 15 §7
Commissions, severance pay, retroactive raises, taxable awards — anything that isn’t a scheduled regular wage is a supplemental wage under IRS Pub 15 §7. This calculator applies the federal flat-rate method (22% / 37%), FICA, and state tax. Learn how it works
2026 tax tables — federal + state estimates for W-2 employees
Flat-rate method: 22% federal + state supplemental rate. W-4 elections don’t apply.
Estimates only. 2026 tax tables. Not tax advice.
Per IRS Pub 15 §7, supplemental wages include bonuses, commissions, overtime pay, severance pay, back pay, awards, prizes, taxable fringe benefits, accumulated sick pay, and retroactive pay increases. Anything that is not a scheduled regular wage is generally supplemental.
Supplemental wages use a flat 22% federal withholding rate instead of the regular percentage-method calculation. This is a simplification — the employee still owes income tax at their actual marginal rate on their annual return.
Technically yes, per Pub 15 §7. In practice, most employers treat overtime paid as part of the normal paycheck as regular wages and run the standard percentage-method calculation. Overtime paid as a separate check can be treated as supplemental and use the 22% flat rate.