this post was submitted on 25 Mar 2024
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This is not correct. Bonuses are no different from other wages. What happens is the payroll software sees you get a big check and withholds taxes as if you got that same check every pay day. The actual taxes you owe on the bonus are likely different from the taxes that are withheld.
Regardless of the tax withholding issue, I would absolutely rather a raise than a bonus. Pay me fairly, then give me a tiny holiday bonus if you want a chance to tell the company merry Christmas.
I'm sorry, but you are 100% incorrect.
Source: Bonus check getter for 30+ years.
https://turbotax.intuit.com/tax-tips/jobs-and-career/how-bonuses-are-taxed/amp/L7UjtAZbh
https://www.kiplinger.com/taxes/how-a-bonus-is-taxed
https://www.cnbc.com/2023/12/27/does-the-tax-on-your-year-end-bonus-check-seem-high-heres-why.html
Bonuses are initially taxed higher, but during tax time you get that money back.
Mate the cnbc link you sent says they just initially withhold more tax but you will get it back in tax returns. So yea immediate money is lower but in the end it evens up.
It evens out... a year later. That doesn't change the fact that your $1000 bonus check is $400 to $600.
I guess you didn’t spend that time reading articles before you link them. They all contradict you by the way. Key point is that “withholding rate” is not the same as “tax rate”.
Bonuses are 100% taxed the same as the rest of your wages.