Webinar Details $199
- Webinar Length: 100 Minutes
- Guest Speaker: Vicki Lambert
- Topic: Payroll, Taxation and Accounting, Human Resources
- Credit: CPE 2.00, RCH 1.50, HRCI 1.50, SHRM 1.50, ATAPR 1.50, ATATX 1.50, ATAHR 1.50
Navigating the rules around supplemental pay taxation can be complex and costly if not handled properly. Since the implementation of the Tax Cuts and Jobs Act of 2017, while the supplemental rate has changed, the IRS requirements for withholding on supplemental wages remain the same. Payroll professionals must continue to manage these responsibilities carefully, as mistakes in this area—such as incorrect tax withholding—can lead to significant penalties, and in extreme cases, even wage theft claims. This webinar provides a comprehensive overview of how to properly handle and tax various forms of supplemental pay, including bonuses, severance pay, and fringe benefits.
Attendees will walk away with a solid understanding of the IRS rules and expectations regarding supplemental wages. The session will offer practical instruction on differentiating between regular and supplemental wage payments, calculating withholding amounts, and applying the appropriate tax rate. Real-world examples will be used to illustrate common and uncommon scenarios, ensuring attendees gain both foundational knowledge and actionable strategies to stay compliant.
Topics Covered in the Webinar:- Definitions and examples of supplemental pay
- Step-by-step tax calculation methods for supplemental wages
- Election options, decision-makers, and timing considerations
- Recordkeeping requirements under mandatory flat rate rules
- Distinguish between supplemental and regular wage payments with confidence
- Apply IRS-approved withholding methods accurately based on pay type and frequency
- Understand when to use the flat rate versus aggregate method and how Form W-4 impacts decisions
- Analyze case studies and real-world examples to apply rules correctly in varied situations
- Meet recordkeeping and compliance requirements with clarity and precision
This session offers practical guidance to help you avoid costly payroll errors, improve compliance, and gain confidence in handling supplemental pay taxation. Whether you're new to payroll or need a refresher, this training ensures you're equipped to apply IRS rules accurately and efficiently.
Who Can Benefit:- Payroll Executives, Managers, Administrators, and Entry-Level Personnel
- Human Resources Professionals
- Accounting and Finance Staff
- Business Owners and Departmental Managers
- Legal Professionals and Lawmakers
- Anyone responsible for payroll compliance and taxation issues
Level: Beginners/Intermediate
Format: Live webcast
Instructional Method: Group: Internet-based
NASBA Field of Study: Taxes
Program Prerequisites: None
Advance Preparation: None
- Introduction
- Our Focus For Today 00:00:55
- Bit of History 00:03:03
- Regular Wages - Definition 00:04:36
- Supplemental Wages - Definition 00:05:43
- Exceptions and Options 00:06:25
- 2007 Change Year 00:08:54
- Two Acceptable Methods 00:10:27
- Two Acceptable Methods (Cont’d) 00:15:45
- Supplemental Rates 2025 00:17:28
- Mandatory Flat Rate Method 00:18:44
- Mandatory Flat Rate Method - Example 1 Split Payment 00:19:57
- Mandatory Flat Rate Method - Example 1 Split Payment (Cont’d) 00:21:23
- Mandatory Flat Rate Method - Example 2 Employer Election 00:23:09
- Mandatory Flat Rate Method - De Minimis Payment By Agent 00:24:10
- Mandatory Flat Rate Method - De Minimis Payment By Agent Example 00:25:34
- Mandatory Flat Rate Method 00:27:01
- Aggregate Method Review 00:28:26
- Aggregate Method Review (Cont’d) 00:28:58
- Aggregate Method Review (Cont’d) 00:31:00
- Example 1 - Aggregate Same Time Payments 00:31:40
- Example 2 - Aggregate Pay at Separate Times 00:32:51
- Example 3 - Aggregate Pay at Separate Times 00:34:55
- Example 4 - Alternate Pay 00:36:03
- Have Not Withheld Taxes 00:38:09
- Vacation Pay 00:40:54
- Nonresident Aliens 00:44:10
- Fringe Benefits 00:45:12
- State Taxation 00:46:51
- California State Tax, Unemployment, and Payroll Tax 00:48:37
- Arizona State Tax, Unemployment, and Payroll Tax 00:49:24
- Current Supplemental Taxation Methods By State 00:50:07
- 2025 Rate Changes So Far… 00:52:13
- Revenue Ruling 2008-29 01:00:05
- Revenue Ruling 2008-29 Scenario 1 01:01:20
- Revenue Ruling 2008-29 Scenario 2 01:03:05
- Revenue Ruling 2008-29 Scenario 3 01:04:59
- Revenue Ruling 2008-29 Scenario 4 01:07:30
- Revenue Ruling 2008-29 Scenario 4 (Cont’d) 01:08:41
- Revenue Ruling 2008-29 Scenario 5 01:09:15
- Revenue Ruling 2008-29 Scenario 6 01:13:35
- Revenue Ruling 2008-29 Scenario 7 01:18:58
- Revenue Ruling 2008-29 Scenario 7 (Cont’d) 01:20:06
- Revenue Ruling 2008-29 Scenario 8 01:22:18
- Revenue Ruling 2008-29 Scenario 9 01:25:00
- Attendee Questions 01:27:43
- Presentation Closing 01:49:46
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Vicki M. Lambert, CPP
Vicki M. Lambert, CPP, is President and Academic Director of The Payroll Advisor™, a firm specializing in payroll education and training. The company offers a payroll news service which keeps payroll professionals up-to-date on the latest rules and regulations.With over 35 years of hands-on experi [...]
CPE Credit
Aurora Training Advantage is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.
For more information regarding administrative policies such as complaint and refund, and cancellation please contact our offices at 407-542-4317 or training@auroratrainingadvantage.com.
You must answer all questions during the webinar, view the recording completely and pass the test at the end with 70% correct answers to receive CPE credit.
RCH Credit
Aurora Training Advantage is an approved provider through the American Payroll Association. To receive credit through the American Payroll Association for this program you MUST attend the program in its entirety.
HRCI Credit
SHRM Credit
ATAPR Credit
Aurora Training Advantage is offering continuing education points designed to recognize dedication to training and excellence in payroll.ATATX Credit
Aurora Training Advantage is offering continuing education points designed to recognize dedication to training and excellence in accounting.ATAHR Credit
Aurora Training Advantage is offering continuing education points designed to recognize dedication to training and excellence in human resources.- Aggregate Method 00:10:23, 00:28:31, 00:31:10, 00:33:37, 00:59:18, 01:07:13, 01:23:16
- AJCA - American Jobs Creation Act 00:03:24
- Alternate Method 00:10:32, 00:31:16, 00:36:06
- Arizona Form A-4 00:49:35
- Deferred Compensation 00:09:09
- De Minimis 00:24:45
- Exempt 00:16:40, 00:19:41
- Fair Labor Standards Act (FLSA) 00:05:10
- Form W-4 00:01:45, 00:02:10, 00:08:34, 00:11:37, 00:19:42, 00:31:27, 00:38:30, 00:40:54, 00:59:12, 01:15:11
- Fringe Benefits 00:01:33, 00:09:16, 00:45:15
- IRC Section 3402(g) 00:04:32
- Mandatory Flat Rate Method 00:15:33, 00:18:50, 00:22:38, 00:24:15, 00:26:49, 01:02:04, 01:23:25
- Nonresident Aliens 00:44:15
- One Big Beautiful Bill Act (OBBB) 00:17:59
- Overtime 00:04:47, 00:05:57, 00:39:51
- Regular Rate of Pay 00:05:03, 00:28:35, 00:01:19
- Regular Wages 00:03:32, 00:04:39, 00:09:04, 01:01:26
- Revenue Ruling 2008-29 00:03:59, 01:00:11
- Severance Pay 00:01:31, 00:06:13, 00:09:07, 00:22:37, 00:28:34, 01:16:01
- Supplemental Pay 00:00:02, 00:01:11. 00:03:33, 00:05:43, 00:18:29, 00:29:03, 00:48:43, 00:54:58, 01:07:22
- Tax Cuts and Jobs Act 00:18:08
- Wage 00:05:27, 00:10:12, 00:18:31, 00:29:05, 00:38:19, 00:41:22, 00:43:24, 01:00:21, 01:03:13
AJCA - American Jobs Creation Act : The American Jobs Creation Act of 2004 was a federal tax act that repealed the export tax incentive, which had been declared illegal by the World Trade Organization several times and sparked retaliatory tariffs by the European Union.
Aggregate Method: Under the aggregate method of withholding, an employer combines supplemental wages with regular wages and withholds on the total as if it were a single payment for the regular pay period.
Alternate Method: Use the supplemental rate for the wages as required instead of Form W-4 to compute the tax withholding amonut.
Arizona Form A-4: Arizona law requires your employer to withhold Arizona incometax from your wages for work done in Arizona. The amountwithheld is applied to your Arizona income tax due when youfile your tax return. The amount withheld is a percentage ofyour gross taxable wages from every paycheck. You mayalso have your employer withhold an extra amount from eachpaycheck.
De Minimis: Too trivial or minor to merit consideration.
Deferred Compensation: Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a later date after which the income was earned. Examples of deferred compensation include pensions, retirement plans, and employee stock options. (en.wikipedia.org)
Exempt : Exempt employee is a term that refers to a category of employees set out in the Fair Labor Standards Act. They do not receive overtime pay, nor do they qualify for the minimum wage
Fair Labor Standards Act (FLSA): The Fair Labor Standards Act of 1938 29 U.S.C. § 203 is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits most employment of minors in "oppressive child labor".
Form W-4: Form W-4 (otherwise known as the "Employee's Withholding Allowance Certificate") is an Internal Revenue Service (IRS) tax form completed by an employee in the United States to indicate his or her tax situation (exemptions, status, etc.) to the employer.
Fringe Benefits: An extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc.
IRC Section 3402(g): Defines supplemental pay and sets requirements.
Mandatory Flat Rate Method: Employers must use this method for supplemental wages in excess of $1 million during a calendar year. Under this method, employers must withhold on the supplemental wages in excess of $1 million at a rate equal to the highest tax rate applicable under Code Sec. 1 for tax years beginning in the calendar year. Currently, the withholding rate is 37%.
One Big Beautiful Bill Act (OBBB): The One Big Beautiful Bill Act, or the Big Beautiful Bill, is a U.S. federal statute passed by the 119th United States Congress containing tax and spending policies that form the core of President Donald Trump's second-term agenda. The bill was signed into law by President Trump on July 4, 2025.
Overtime: Overtime is time and a half of what an employee earns for every hour worked over 40 in a workweek. The FLSA salary threshold is the minimum salary employers must pay employees for them to be exempt from overtime wages.
Regular Rate of Pay: An employee’s regular rate is the hourly rate an employee is paid for all non-overtime hours worked in a workweek. When calculating an employee’s regular rate, all compensation received by the employee in a workweek must be included, including wages, bonuses, commissions, and any other forms of compensation.
Regular Wages: "Regular wages" means wages paid by an employer for a payroll period either at a regular hourly rate or in a predetermined fixed amount.
Revenue Ruling 2008-29: Revenue Ruling 2008-29 provides guidance with respect to income tax withholding in nine different situations involving the payment of supplemental wages.
Severance Pay: An amount paid to an employee upon dismissal or discharge from employment. Severance pay is usually given by an employer to its employees who are laid off or terminated for reasons other than firing-for-cause. ... In general, severance pay is up to the employer's discretion and is only legally required under specific circumstances.
Supplemental Pay : Supplemental pay is money given to employees in addition to their regular wages. Supplemental wages include bonuses, commission pay, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retro pay increases, and payments for nondeductible moving expenses.
Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.
