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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
- Add your regular wages to your supplemental payments
- Use that total to determine withholding by using the Minnesota Withholding Tax tables or Minnesota Withholding Tax Calculator
Method 2
- Use the Minnesota Withholding Tax tables or Minnesota Withholding Tax Calculator to determine how much to withhold from the total pay
- Multiply the supplemental payments by 6.25% to determine how much to withhold from the payments
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