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[quote=Anonymous][quote=Anonymous][quote=Anonymous]They aren’t taxed at a higher rate, but taxed as if you earn that much every two weeks. You can adjust your deductions with payrolls in the weeks before if you want less taken out. [/quote]

This. I always assumed that in the pay period where I receive the bonus it "looks like" I make that additional income for all pay periods, hence I am taxed at a much higher rate. So for instance, last year my salary was $176,300 and I received a $5,400 bonus. I was not taxed as if I made $181,700, but as if I made $176,300/26 pay periods + $5400. That would make it appear as if my salary was $316,700 per year! If I am correct, when you file your annual taxes, you would theoretically get back the difference between what was withheld and what should have been withheld for your normal salary, so either you would get a bigger refund, or owe less tax, however your situation shakes out.[/quote]

Companies can choose to treat it as if you made that much for the pay period, or withhold at 22% (except if the bonus is over $1M, in which case everything over $1M has to be withheld at 37%).[/quote]

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