The extras on a paycheck are not all the same money

Published 2026-10-22 · Last reviewed 2026-10-22

A bonus, an overtime hour and a tip all look like the same kind of extra on a payslip, and each reaches the bank through a different machine. One is withheld at a flat rate, one is a premium on hours already worked, and one is ordinary wages that the employer has to allocate if it is not reported. This page prices all three on one paycheck, then adds the employer-side payroll tax that never appears on the employee's stub.

A bonus is withheld at 22 percent, not taxed at 22 percent

A $10,000 bonus is supplemental wages, and the employer withholds a flat 22 percent on it: $2,200 goes to the IRS and $7,800arrives. That 22 percent is a withholding rate, not a tax rate - if your own bracket is higher, the difference is settled on the return rather than at the paycheck. The flat rate holds until a single employee's supplemental wages for the calendar year pass $1,000,000; above that line the excess is withheld at 37 percent instead.

Overtime is a premium on the same hours

At $25 an hour, 40 straight-time hours and 8 overtime hours at the federal minimum of 1.5x make $1,300 for the week. The overtime premium - the extra half paid only because those hours were overtime - is $100; the overtime hours themselves earn $300 including their straight-time part. Across $48 hours the blended rate is $27.08, and the premium is 7.69 percent of the week's gross. At 52 weeks like this the year is $67,600. A nondiscretionary bonus would raise the regular rate the premium is built on, so the premium line is not simply half of the base rate times the overtime hours.

Tips are wages, and the 8 percent check is the employer's

$600 of tips a month is $7,200 a year, and tips are wages for Social Security and Medicare. With $40,000 already paid by the same employer this year, $144,500 of the Social Security wage base is still open; Social Security takes $446 at 6.2 percent, Medicare takes $104 at 1.45 percent, and the year's tips keep $6,649 after $551 of FICA. Reporting starts at $20 a month from one job, by the 10th of the following month. If reported tips fall below 8 percent of food and drink sales, the employer allocates the difference: on $10,000 of sales the target is $800, so $200 is added to wages. Tips that are never reported can carry a penalty of 50 percent of the FICA on them, about $275 on a year like this one.

The employer pays a second payroll tax

The employee's half of FICA is only half the story. On $60,000 of wages the employer matches 6.2 percent of Social Security up to the $184,500 wage base and 1.45 percent of Medicare, which is $4,590; adds FUTA at an effective 0.6 percent on the first $7,000, or $42; pays state unemployment at 2.7 percent on the first $10,000, or $270; and adds a 3 percent retirement match of $1,800 plus $7,200 of benefits. Payroll taxes alone are $4,902; the fully loaded cost is $73,902 per employee, 23.17 percent above wages and 123.17 percent of wages in total.

Where these numbers come from

• IRS Publication 15 (2026). The 22 percent and 37 percent supplemental-wage rates, the $1,000,000 per-employee line, the FICA rates and the FUTA wage base all come from the employer's tax guide. A payment that crosses the million-dollar line is split into the two rates.
• IRS Publication 531. The $20 monthly reporting line, the 8 percent allocation and the 50 percent penalty are the published rules, so the tips calculator and this page allocate the same way.
• The Fair Labor Standards Act. The 1.5x premium is the federal floor for hours past 40 in a week; the overtime calculation also spreads a nondiscretionary bonus across every hour before applying the premium, which is why the regular rate can exceed the nominal hourly wage.
• The employer-side costs. $4,590, $42 and $270 come from the same payroll-tax rates used for the employee side, not from percentages typed into the page.

What this guide does not cover

It prices one bonus, one overtime week, one month of tips and one employee at one set of rates. It does not model state income tax, local wage tax, pre-tax 401(k) or HSA deductions, the tip credit, a tipped minimum wage, double time beyond the federal rule, exempt salaried employees, or the taxation of fringe benefits. A real bonus can also be paid with regular wages in a single paycheck, which uses the aggregate method rather than the flat rate shown here; a real tips year can have several employers and a wage base shared across all of them. The employer cost is arithmetic, not a payroll filing.

Estimate what a bonus withholds in the Bonus Tax Calculator, total an overtime week in the Overtime Calculator, check the FICA on tips in the Tips Tax Calculator, or load the full employer cost in the Payroll Tax Calculator.

Estimates only - not financial, tax or legal advice, and it does not predict how the IRS will treat a particular return. Read the full disclaimer.