Use the Additional Earnings type when you need to pay supplementary taxable income that isn't part of normal wages, commissions, tips, bonuses, PTO, or reimbursements. For example, if you need to pay severance, you could create a custom severance earnings type using the Additional Earnings category.
Supplemental earnings are any wages or payments to workers that are part of normal hourly or salaried wages, and are not determined by the amount of time worked in a period.
Withholding for Supplementary Earnings
Taxes for supplementary earnings may be calculated differently from normal earnings:
- As an amount separate from normal earnings, and withheld at a flat 22% (or, for those who earn more than $ 1 ,000,000 annually, 37% on the portion above $ 1 ,000,000), or
- Together with normal earnings from the current or previous pay period as a single sum, withheld according to allowances, filing status, and pay schedule.
If someone has regular earnings and supplementary earnings in the same paystub, Zenefits Payroll will withhold taxes from the combined amount based on the the W-4 information and annualized wages. The supplemental rate is only used for supplementary earnings paid in an off-cycle run, without regular wages.