how does the tax calculated on bonus. is it calculated only on bonus amount or monthly/bi-weekly pay + bonus amount.
just need to confirm before i go talk to someone in HR.
thanks
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Inderpal Singh
Sorry - yesterday was the deadline for all complaints
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In My company they issue a separate check for Bonus... Tax is much higher for bonus as compared to weekly/biweekly earnings.
In my case the tax on bonus was 15 % higher than my usual tax rate.
Quote:
Originally posted by yanksingh
how does the tax calculated on bonus. is it calculated only on bonus amount or monthly/bi-weekly pay + bonus amount.
The tax deducted on our regular paycheck is based on some annual salary - assuming that salary will remain same for rest of the year.
When you get your bonus, your annual salary changes.
These are rough estimates, and just an example:
For annual salary of $45K your taxes will be:
(15% of 38K) + (22% of remaining 7K)
That is 5.7K + 1540 = 7240. (7240/24=301 per paychk)
Now, add $5K bonus to this scenario. Now the total earning is 45+5=50K.
The tax number changes.
(15% of 38K) + (22% of remaining 7K) + (22% of 5K)
That is 5.7K + 1540 + 1100 = 8340 (That's 8340/24=347.5 per paycheck)
That additional tax (347-301=$46) is dumped as taxes on the bonus. So, it looks like the bonus is taxed more!
Hope experts throw more light here
ohh ..i got it. thanks for your help folks..
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Inderpal Singh
Sorry - yesterday was the deadline for all complaints
___________________________________
Quote:
Originally posted by sville
Quote:
Originally posted by yanksingh
how does the tax calculated on bonus. is it calculated only on bonus amount or monthly/bi-weekly pay + bonus amount.
The tax deducted on our regular paycheck is based on some annual salary - assuming that salary will remain same for rest of the year.
When you get your bonus, your annual salary changes.
These are rough estimates, and just an example:
For annual salary of $45K your taxes will be:
(15% of 38K) + (22% of remaining 7K)
That is 5.7K + 1540 = 7240. (7240/24=301 per paychk)
Now, add $5K bonus to this scenario. Now the total earning is 45+5=50K.
The tax number changes.
(15% of 38K) + (22% of remaining 7K) + (22% of 5K)
That is 5.7K + 1540 + 1100 = 8340 (That's 8340/24=347.5 per paycheck)
That additional tax (347-301=$46) is dumped as taxes on the bonus. So, it looks like the bonus is taxed more!
Hope experts throw more light here
Nice Information..........
Thanks Sville
Location: carl sagan's universe
Posted on: 28-02-09 07:43:34
Quote:
Originally posted by sville
Quote:
Originally posted by yanksingh
how does the tax calculated on bonus. is it calculated only on bonus amount or monthly/bi-weekly pay + bonus amount.
The tax deducted on our regular paycheck is based on some annual salary - assuming that salary will remain same for rest of the year.
When you get your bonus, your annual salary changes.
These are rough estimates, and just an example:
For annual salary of $45K your taxes will be:
(15% of 38K) + (22% of remaining 7K)
That is 5.7K + 1540 = 7240. (7240/24=301 per paychk)
Now, add $5K bonus to this scenario. Now the total earning is 45+5=50K.
The tax number changes.
(15% of 38K) + (22% of remaining 7K) + (22% of 5K)
That is 5.7K + 1540 + 1100 = 8340 (That's 8340/24=347.5 per paycheck)
That additional tax (347-301=$46) is dumped as taxes on the bonus. So, it looks like the bonus is taxed more!
Hope experts throw more light here
nice. except division is done by 26.
Quote:
Originally posted by investpro
nice. except division is done by 26.
12, 24, 26, 53, whatever is your case.
No spoon feeding here
