Supplemental tax rates should be used when paying supplemental wages. This article will go over the rates by each state.
What is a supplemental tax?
A supplemental tax rate is a percentage that would be used on income generally paid outside of a regular payroll cycle. The supplemental tax rate would apply to federal and state income taxes withheld on these supplemental wages. Some examples of supplemental income are:
- Bonus Payments
- Commission Payments
- Awards or Prizes
The Fuse system keeps track of supplemental tax rates in the background tax calculation system. As long as you use an earning code with the type Bonus (Supplemental Tax Rate), the federal and state taxes will automatically calculate on the supplemental pay, even if that amount is added to a regular payroll check. To review your earning code types in the system, go to Settings > Payroll Setup > Earning Codes.
Supplemental Tax Rates
The following is a list of the supplemental tax rates by state as of 2024. You must contact the agency directly if you have any questions regarding specific states or locations.
| Federal Income | 22% |
| Alabama | 5% |
| Alaska | No state withholding taxes |
| Arizona | No supplemental tax rate |
| Arkansas | 4.4% |
| California | 10.23% for Bonus/Stock Options, 6.6% on everything else |
| Colorado | No supplemental tax rate |
| Connecticut | No supplemental tax rate |
| Delaware | No supplemental tax rate, but deferred compensation should be 5% (Delaware's FAQ) |
| District of Columbia - Washington, DC | No supplemental tax rate |
| Florida | No state withholding taxes |
|
Georgia |
Supplemental rates are dependent on the employee's annual income: <$8,000: 2% $8,000 - $10,000: 3% $10,000.01 - $12,000: 4% $12,000.01 - $15,000: 5% >$15,000: 5.49% |
| Hawaii | No supplemental tax rate |
| Idaho | No supplemental tax rate |
| Illinois | No supplemental tax rate |
| Indiana | No supplemental tax rate |
| Iowa | 6% |
| Kansas | 5% |
| Kentucky | No supplemental tax rate |
| Louisiana | No supplemental tax rate |
| Maine | 5% |
| Maryland | Use the rate at the bottom of the local tax table. Use 3.2% for MD residents working in DE or other nonreciprocal states. |
| Massachusetts | No supplemental tax rate |
| Michigan | No supplemental tax rate |
| Minnesota | 6.25% |
| Mississippi | No supplemental tax rate |
| Missouri | 4.8% |
| Montana | 5% |
| Nebraska | 5% |
| Nevada | No state withholding taxes |
| New Hampshire | No state withholding taxes |
| New Jersey | No supplemental tax rate |
| New Mexico | 5.9% |
| New York | 11.7% |
| North Carolina | 4.6% |
| North Dakota | 1.5% |
| Ohio | 3.5% |
| Oklahoma | 4.75% |
| Oregon | 8% |
| Pennsylvania | No supplemental tax rate |
| Rhode Island | 5.99% |
| South Carolina | No supplemental tax rate |
| South Dakota | No state withholding taxes |
| Tennessee | No state withholding taxes |
| Texas | No state withholding taxes |
| Utah | No supplemental tax rate |
| Vermont | 30% of Federal Income Taxes, or withhold 6% for nonqualified deferred compensation |
| Virginia | 5.75% |
| Washington | No state withholding taxes |
| West Virginia |
Supplemental rates are dependent on the employee's annual gross salary: <$10,000: 2.36% $10,000 - $25,000: 3.15% $25,000.01 - $40,000: 3.54% $40,000.01 - $60,000: 4.72% >$60,000: 5.12% |
| Wisconsin |
Supplemental rates are dependent on the employee's annual gross salary: <$12,760: 3.54% $12,760 - $25,520: 4.65% $25,520.01 - $280,950: 5.3% >$280,950: 7.65% |
| Wyoming | No state withholding taxes |