Virginia Bonus Tax Calculator:
Employers' Trusted Tool for Accurate Bonus Payments
The Virginia bonus tax calculator available on this page utilizes the supplemental tax rate, making it simple for employers to figure out the net pay (or take-home pay) an employee should receive for wage payments like bonuses.
Does Virginia Tax Bonuses?
Yes, Virginia considers bonuses part of taxable wages and typically taxes them using its standard withholding tables. However, if bonuses (or other supplemental wages) are paid separately from an employee’s regular wages, and income tax has already been withheld from the regular wages, employers have the option to withhold using a flat rate of 5.75%. You can use the calculator above, powered by Beyond, to run this specific rate calculation.
How to Calculate Bonus Tax in Virginia
Supplemental wages, which include bonuses, commissions, overtime pay, back pay, and non-deductible moving reimbursements, are usually combined with regular wages and taxed using the state’s standard withholding method.
If supplemental wages are processed:
– Combined with regular wages in a single payment (and not itemized separately), calculate withholding as if the total amount were a single wage payment.
– Paid separately, calculate withholding as if the supplemental wages were added to the employee’s most recent or current regular payroll period.
Key Information on Virginia Bonuses
How are Bonuses Paid in Virginia?
In Virginia, employers can issue bonuses via:
– Check
– Direct deposit
– Pay card
How Do Bonuses Work?
Bonuses are treated as income, taxed via normal withholding, and reported on the employee’s Form W-2 at the end of the year.
What is the Virginia Bonus Tax Rate?
Virginia’s income tax rates range from 2% to 5.75%, based on income level. The flat rate of 5.75% may be used for bonuses paid separately, provided tax was already withheld from regular wages (this is the method the calculator on this page uses to crunch the numbers).
Are Bonuses Taxed Differently Than Standard Pay?
They are not—Virginia applies its standard withholding rates to all types of compensation.
How Much Tax is Taken Out of a Bonus?
The total combined withholding can be up to 5.75% state + 22% federal = 27.75% (The 22% federal rate is the flat rate generally used for supplemental wages up to $1 million).