Basics of Supplemental Pay Taxation

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.

• 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.

• 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