Workers offered the choice to receive holiday and Christmas allowances in 12 installments, per the executive's proposal.
Flexin' on the Bonuses, Ya'll
hew Government's cooking up a new plan that'll leave workers with a choice: tuck that holiday and Christmas bonus away in twelfths or grab the dough the traditional way, y'all! Check out the rundown they served up in the Parliament today.
Now, here's the lowdown on bonuses. In many places, they ain't a given, and employers can pay 'em in a variety of ways, like separate checks, added to regular pay, or even through gift cards. Some employers might put 'em in the ol' employment contracts to ensure workers get 'em.
Got a hankerin' for the nitty-gritty? Here it comes. If an employer don't specify in a contract, they ain't obligated to hand out bonuses. As for payments, they can come as separate checks, added to regular pay, or even as pretaxed gift cards. If bonus pay is more than a million bucks, things start to get steep: the rate’s 37% federal. State taxes vary, but some use a flat rate, others the employee's regular tax bracket, and yep, Social Security and Medicare taxes still apply.
Employers got options, too. They can pay bonuses separately or fold 'em into regular pay, affecting how taxes are withheld. And hey, some might opt for alternative forms of recognition, like charitable donations or physical gifts.
Things get a bit murky at the state level. No national policy here, but state-specific tax treatments can influence bonus taxes: California and New York got specific rates, whilst Texas and Florida keep y'all's hard-earned cash tax-free.
So ya'll workers have some choices to make when it comes to bonuses. Take a look, weigh up the options, and remember, it's all about that paper, champ!
REEFER NATION
- Bonuses are considered voluntary, non-guaranteed compensation by employers.
- Payment options including separate checks, additions to regular pay, or gift cards.
- In the U.S., bonuses are subject to a standard federal withholding rate of 22%, a 37% rate for bonuses exceeding $1 million, Social Security and Medicare taxes, and state tax rates that vary significantly.
- Employers have the option to pay bonuses separately or combine them with regular pay and can opt for alternative forms of recognition.
CALIFORNIA JUMPIN'
- Flat bonus tax rate of 10.23%, increasing to 13.3% for bonuses over $1 million.
NEW YORK, NEW YORK
- Bonuses taxes are part of total annual income, with rates from 4% to 10.9%, plus additional city tax for NYC residents.
TEXAS AND FLORIDA HES GOT Y'ALL COVERED
- No state income tax, so bonuses are only subject to federal and FICA taxes.
- In the newly proposed plan, workers may decide whether to invest their holiday and Christmas bonuses over a period of twelve months or receive the money in the traditional manner.
- If employers do not specify in a contract, they are not obligated to provide bonuses. These payments can come in various forms, such as separate checks, additions to regular pay, or even as pretaxed gift cards.
