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Supplemental Payments

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Supplemental payments are any payments made to employees in addition to regular wages. Common examples include:

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

Minnesota follows the federal guidelines for supplemental payments. For details on federal withholding guidelines, see IRS Publication 15-A.

How Much Tax to Withhold from Supplemental Payments

It depends 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%

With regular wages, and list them separately on your payroll records Use Method 1 or 2
With regular wages, and list them together on your payroll records Use Method 1

Method 1

  1. Add your regular wages to your supplemental payments
  2. Using the result from step 1, determine withholding by using the Minnesota Withholding Tax tables or Minnesota Withholding Tax Calculator

Method 2

  1. Use the Minnesota Withholding Tax tables or Minnesota Withholding Tax Calculator to determine how much to withhold from the total pay
  2. Multiply the supplemental payments by 6.25% to determine how much to withhold from the payments

Contact Info

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