@advicewitherin 💰it’s okay, it’s confusing lol let me break it down 💃🏼 ❌ MYTH: Bonuses are taxed higher than salary. ✅ TRUTH: Bonuses are taxed exactly the same as salary. The reason why you might see a huge chunk taken out of your bonus is because of tax withholding, and that’s on your company’s payroll department. There are two ways companies withhold your taxes on a bonus: 1. Percentage Method: the employer gives the bonus & withholds taxes at a flat 22% rate (unless your bonus was over $1 million, then it’s 37%) 2. Aggregate Method: the employer gives the bonus with your normal paycheck & uses the total amount to calculate withholding Talk to your payroll department to discuss your options! 💸 You got this! 👏 #salary #money #bonus

Ugh, I hate how bonuses are taxed at a higher rate. It's so unfair. Oh, yeah. That's actually a myth. What? A rumor. A complete misunderstanding. What do you mean? I just got my bonus and like 40% of it is gone, even though usually my taxes are like 20%. Yeah, okay, so your bonus is considered taxable income, which means the IRS taxes it the same way they tax your salary. The reason that more taxes were taken out of the paycheck with your bonus is because your income went up just for that pay period, which bumped you into a higher tax bracket, meaning your tax withholding was higher. But it all gets sorted out during your tax refund. Oh, so my bonus wasn't taxed higher, but the tax withholding was higher. Exactly. And you know, you can always talk to your finance department to see if you can adjust your withholding so that you can get more of your bonus now so that you don't have to wait until your tax refund. So bonuses are not taxed higher than salary. That's a myth. Yep, total myth. I mean, I can see how it's confusing, but now you know. You got this. And follow for more.