Federal Income Tax withholdings on Supplemental Wages

Supplemental wages are paid through a casual other earning in SchoolFi.  The District has two options for Federal Income Tax Withholdings.  The options are outlined in IRS Publication 15 (Circular E).

Supplemental wages combined with regular wages.

If you pay supplemental wages with regular wages but don't specify the amount of each, the District can withhold federal income tax as if the total were a single payment for a regular payroll period.

Supplemental wages identified separately from regular wages.

If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method can be either:

A.  Withhold a flat 22% (no other percentage allowed).

OR

B.  If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages and withhold federal income tax as if the total were a single payment for a regular payroll period utilizing the Percentage Method table as detailed in IRS Publication 15-T. 

The follow chart highlights the two options and the Federal Income Tax withhold treatments:   

Activating the 22% Flat Rate

The 22% flat rate withholding is set on a casual other earning basis.  To set a casual other earning to the 22% flat rate, navigate to the Payroll >>> Other Earnings tab, find the casual other earning and click on the Modify button.