Bonus — Payroll Definition

What is Bonus?

A bonus is generally treated as supplemental wages for federal withholding. Depending on how it is paid and the amounts involved, an employer may use the IRS percentage method or aggregate it with regular wages. The amount withheld is a prepayment, not a special final tax rate for the bonus; actual income-tax liability is reconciled on the employee's return.

How to apply this payroll definition

Locate the label beside its current-period amount, taxable-wage basis, and year-to-date total. Compare it with prior genuine statements, benefits materials, the employer's payroll documentation, and the primary source linked on this page. The same abbreviation can carry a different employer-specific meaning.

What the label does not prove

A familiar term or plausible amount does not authenticate a pay statement or confirm identity, employment, wages, deductions, tax compliance, or eligibility. Ask the verified payroll contact about an unknown code. Use current agency instructions or a qualified adviser when a rate, filing, benefit, garnishment, or legal decision depends on the answer.

Browse all payroll definitions or use the pay-statement codes guide.