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Last Updated: 10/31/2018

Withholding on Supplemental Payments

Minnesota follows the federal guidelines for supplemental payments. Common examples of supplemental payments include:

  • Vacation, accumulated sick leave, or overtime pay
  • Back pay or severance pay
  • Bonuses, commissions, awards, or prizes
  • Nondeductible moving expenses

For more information on federal withholding guidelines:

  • See Internal Revenue Service Publication 15-A.
  • Call the Internal Revenue Service at 1-800-829-4933.

How much Minnesota tax should I withhold from supplemental payments?

Your withholding will depend on when you make the supplemental payments and how you list them in your payroll records.

If you make supplemental payments ​Then
​Separate from regular wages ​Multiply the supplemental pay amount by 6.25 percent to calculate your Minnesota withholding.
​With regular wages, and list them separately on your payroll records ​Use Method 1 or 2 below to calculate your Minnesota withholding.
​With regular wages, and list them together on your payroll records ​Use Method 1 below to calculate your Minnesota withholding.

Method 1

1. Calculate the total pay by adding your regular wages to your supplemental payments.

2. Determine how much to withhold from the total pay by using the Minnesota Withholding Tax tables or Minnesota Withholding Tax Calculator.

Method 2

1. Determine how much to withhold from regular wages by using the Minnesota Withholding Tax tables or Minnesota Withholding Tax Calculator.

2. Multiply the supplemental payments by 6.25 percent to determine how much to withhold from the payments.