What does it mean to use supplemental tax rates

Hello there, Hrstar. Let me explain what it means to use supplemental tax rates for bonus payrolls in QuickBooks Online (QBO).

Supplemental tax rates are a flat federal withholding method used for bonuses, commissions, and other supplemental wages. These are taxed separately from regular wages under IRS rules to simplify tax calculations.

When processing a bonus payroll in QBO, you can apply the supplemental rate, which withholds federal income tax instead of calculating it based on the employee's regular pay.

For more details, you can review the IRS Guidelines to see how these rates are applied.

You can revisit this thread if you have follow-up questions.