[grinch]

okay, this is basically a whine and bitch thread. i just got my christmas bonus. i got my first christmas bonus ever last year from this company, and i am very pleased to find that they were generous enough to give me one this year as well, and it was even a little more than last year's.

my problem is, i tear it open to find that 42% of it was taxed away. i'm not exactly sure why it was so high, i mean i'm used to getting aruond 30% taken out each week, but i've been working some overtime lately so maybe i got bumped up the tax bracket a bit. either way, it's a bit of a letdown.. anybody find a similar dent in their bonuses this year?

 

[bootman]

At least you get a bonus.
I only get stock options.
(Which are currently only good for lining bird cages)

 

[JMT]

Quote:

I only get stock options. (Which are currently only good for lining bird cages)

I feel your pain Bootman. I have 4 vested options that the our stock price is currently 10%+ less than the grant price.

 

[BDA_ABAT]

Options? Bonuses? I've heard of these things before.... never actually seen one though.

Ahhh... the joys of academia!

Bruce

 

[Mr.PD]

I know what you mean. Although mine isn't a Christmas bonus I do get my year end productivity check in the middle of December every year. Between 401k withholdings and taxes I get just a little over half of it. I think it's a crime to tax bonus checks the way they do.

 

[nec]

That's how my employer does:
For bonuses they use the same tax percentage for all employees. Then you get your money back in April.

 

[mbriant]

Quote:

my problem is, i tear it open to find that 42% of it was taxed away. i'm not exactly sure why it was so high, i mean i'm used to getting aruond 30%

I imagine the U.S. tax levels are scaled similarly to Canada's, where your tax rate increases as you reach certain income levels.

Crude example only: You earn $50,000 per year in salary. The government taxes you at say 20% for the first $20,000 you earn, 30% on the next $20,000 you earn and 40% on the next $20,000. They do it this way so higher income people pay more taxes...not only more because they earn more, but they end up paying a higher percentage as well.

To keep your weekly tax deduction simple and the same amount each week throughout the year, based on your total estimated yearly income, your employer will work out an average of all these percentages and deduct that average percentage each week throughout the year. If your estimated yearly income turns out to be accurate, by the end of the year you should have close to exactly the right amount of total deductions.

Any money you earn additional to your regular pay which will increase the amount of your annual income above $50,000 ( like overtime or bonuses) gets taxed at 40%, your tax rate on income between $40,000 and $60,000.

Note to everyone: Taxes are a big part of life. It's financially well worth the time and effort to understand them as much as possible as soon as possible.

 

[disturbed]

Guys move to where I live.
There's No Tax

 

[ServinginEcuador]

It seems that every time I reach into my pocket to pull some money out, there's a goverment official or tax man with his hand already in it!!!

Isn't this the reason they had the Boston Tea Party?? To protest taxation!! And what was their tax rate that they were protesting, like 15% or something. Makes ya think, huh!!!

 

[grinch]

i realize that canada's taxes are much worse, but i really couldn't care less. at least you guys have decent healthcare. if i injure myself, unless i'm at death's door, i get to wait for four hours at the emergency room before getting admitted.

i think it's a bit ****ty that i work hard all year to pay other people's unemployment, but hey.. that's just me. did they work all year?

 

[Gergor]

For supplementary income, a flat 28% (min) is used for federal withholdings. The key word is withhold, you are not being taxed more from your bonus.

 

[grinch]

my stub says under Deductions - Statutory:
Federal Income Tax
Social Security Tax
Medicare Tax
NY State Income Tax

no mentioning of withholdings.

 

[recephasan]

Hi grinch,

Unlike salary checks, bonuses are subject to a flat rate, which is (or was, when I last got one) ~40%.

The good thing is that it is a Christmas bonus, and not a January bonus, which means you can get your money back quickly if you file your taxes right away.

 

[jude]

[size=xx-small] Quote:

Originally posted by grinch i realize that canada's taxes are much worse, but i really couldn't care less. at least you guys have decent healthcare....

[/size]http://www.csmonitor.com/2002/0828/p01s04-wogi.html

 

[jpelg]

Quote:

my stub says under Deductions (tax)... no mentioning of withholdings.

Technically, Gergor is correct. Your employer is simply withholding those funds based on a calculation it's payroll system does each pay period to estimate what you will be making for the whole year, and therefore what they should deduct from your gross pay. That way, you do not find yourself owing the Feds big bucks that you did not have the foresight to save when April 15th rolls around. You can tell your employer to withhold less by claiming more tax deductions, but there is a limit, I believe. People that are self-employed have to do this quarterly, I believe.

My guess is that your bonus was entered and processed in the payroll system similiar to a normal pay period. The bonus may be more than a normal weekly amount, so that boosted the calculated extrapolation for your yearly salary (the system thinks you make that every week!), and withheld accordingly. You will probably get alot of that back.