Why would I want to pay commission in a separate check?

There are a few reasons to do a separate Commission Checks run:

• You want to control the tax treatment of a commission or the withholding of retirement account deductions. For example, an employee might want a commission to be withheld at the flat 25% supplemental rate for federal income tax. It isn't possible to control the tax rate when you include the commission on a payroll check.
• You want to turn off direct deposit for the commission check.
• You're paying the commission offcycle, not on a regularly scheduled payday.
• The commission was earned over a different period than the current pay period.
• The employee has accumulated $1,000,000 or more in supplemental wages and you're required to withhold federal taxes at 35%.

If your state also has a supplemental tax rate, we apply the state rate when you choose to use supplemental rates. Some states don't have a supplemental tax rate, so in these states, we apply only the federal supplemental tax rate if you check that box.

If the employee has accumulated $1,000,000 or more in supplemental wages in the current tax year, you must withhold federal income tax at 35%.

See also

• Paychecks: Pay commission separate from a regular paycheck
• Payroll topics

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