Bonuses and commissions—those sweet little extras that make payday feel like Christmas. But figuring out how they hit your bank account?
That’s less festive and more like untangling holiday lights. In Nevada, where there’s no state income tax (hooray!), the math still involves federal taxes and payroll quirks.
We’ve tapped payroll specialists to break it down, complete with examples from Nevada businesses, so you can cash in without the confusion.
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Bonuses vs. Commissions: The Basics
- Bonuses: One-off rewards for crushing it—think performance or holiday gifts. A payroll pro said, “It’s like a high-five with cash.”
- Commissions: Tied to sales or goals, common in real estate or retail. They’re your reward for hustle.
Both get the “supplemental income” label from the IRS, meaning they’re taxed differently than your regular pay.
The Tax Breakdown:
- Flat Rate (Percentage Method): 22% federal tax on bonuses/commissions—most employers use this for simplicity.
- Combined (Aggregate Method): Added to your regular pay and taxed at your bracket rate—could be higher or lower.
Social Security (6.2%) and Medicare (1.45%) apply too, but no state tax in Nevada—score!
Real Nevada Examples:
Imagine you’re a Vegas realtor:
- Commission: $10,000 from a home sale.
- Federal Tax (22%): $2,200.
- Social Security: $620.
- Medicare: $145.
- Take-Home: $7,035.
A payroll guru advised, “Set aside 30% for taxes to be safe—better safe than scrambling come April.”
Don't make things harder, use nevada paycheck calculator.
Maximizing Your Haul
- Structure Smart: Negotiate commission plans with long-term payouts.
- Time It Right: Big bonuses near year-end might bump your tax bracket—split them if you can.
- Spend Wisely: Stash some in savings or debt payoff. Future you will send thank-you notes.
Employers, double-check your payroll system—screw-ups here are a legal headache.
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