The flat percentage method commonly uses which rate for supplemental wages?

• A. 18%
• B. 12%
• C. 28%
• D. 22%

Answer: (D)

When withholding federal income tax on supplemental wages using the flat percentage method, you apply a single fixed rate to the supplemental amount. The commonly used rate is 22%, applied to bonuses or other supplemental pay that’s issued separately from regular wages. This fixed rate simplifies withholding and is designed to approximate what would be withheld if the extra pay were part of the regular wages, without needing to know the employee’s usual tax bracket. The other rates listed aren’t the standard flat percentage used for this method. Note that Social Security and Medicare taxes still apply as they would to regular wages, separate from this federal income tax rate.