Illinois Bonus Tax Calculator:
Employers' Trusted Tool for Accurate Bonus Payments
The bonus tax calculator from Beyond, located at the top of this page, helps employers quickly estimate the net (take-home) pay employees should receive for bonus payments, utilizing the state’s flat income tax rate.
Does Illinois Tax Bonuses?
Yes. Illinois applies its flat income tax rate to all wages, and that includes bonuses. It is important to remember that this withholding also applies to commissions and other types of supplemental compensation, such as vacation pay that is issued in addition to an employee’s regular wages for their vacation period.
How to Calculate Bonus Tax in Illinois
You must apply the state’s flat withholding rate of 4.95% to any bonus payment. This is in addition to the standard 22% federal rate for supplemental wages. You can use the calculator at the top of this page to perform this calculation for you.
How Can Employers in Illinois Pay Bonuses to Employees?
Bonuses can be disbursed through various common methods:
– Check
– Direct deposit
– Pay card
Why Are Bonuses Taxed Differently Than Standard Pay?
In Illinois, they are not taxed differently—the same flat rate applies to both regular and supplemental wages. The uniform rate simplifies the withholding process for both pay types.
How Much Tax is Taken Out of a Bonus in Illinois?
Here are the combined percentages you should be aware of:
This total represents the withholding for state and federal income tax, plus any other applicable deductions.
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