Arkansas Bonus Tax Calculator:
Employers' Trusted Tool for Accurate Bonus Payments
The Arkansas bonus tax calculator available on this page helps employers quickly estimate the net pay (or take-home pay) an employee may receive from bonus payments.
Does Arkansas Tax Bonuses?
Yes. Arkansas considers bonuses to be taxable wages and requires state income tax withholding on bonus and other supplemental wage payments.
However, when bonuses are paid separately from regular wages, employers may apply a flat Arkansas supplemental withholding rate (commonly 3.9%).
You can use the calculator above, powered by Beyond, to estimate the state withholding and take-home pay for bonus payments.
How to Calculate Bonus Tax in Arkansas
Supplemental wages—including bonuses, commissions, overtime pay, back pay, and certain additional wage payments—are generally treated as wages for withholding purposes.
If supplemental wages are processed:
– Paid separately from regular wages: employers may apply a flat Arkansas supplemental withholding rate (commonly 3.9%)
– Combined with regular wages: withholding is calculated using standard payroll withholding tables
For federal withholding:
– 22% applies to most supplemental wages
– 37% applies to supplemental wages above $1 million in a calendar year
Key Information on Alaska Bonuses
How Are Bonuses Paid in Arkansas?
Employers may issue bonuses through:
– Check
– Direct deposit
– Pay card
How Do Bonuses Work?
Bonuses are treated as taxable compensation. They are subject to:
– Federal income tax withholding
– Arkansas state income tax withholding
– Social Security tax
– Medicare tax
They are reported on the employee’s Form W-2 at the end of the year.
What Is the Arkansas Bonus Tax Rate?
Arkansas allows employers to withhold state income tax from bonuses and supplemental wages using a flat rate when paid separately.
A commonly used rate is approximately 3.9% for supplemental wage withholding.
The calculator on this page uses this Arkansas supplemental withholding approach.
Are Bonuses Taxed Differently Than Standard Pay?
At the state level, bonuses may be withheld at a flat supplemental rate when paid separately.
At the federal level, bonuses may be taxed using the supplemental wage method (22%) when paid separately from regular wages.
How Much Tax Is Taken Out of a Bonus?
For most bonus payments in Arkansas, estimated withholding may include:
– Arkansas state withholding (≈3.9%)
– 22% federal supplemental withholding
– FICA taxes (Social Security and Medicare)
This results in a combined estimated withholding of approximately 25.9%, before FICA taxes, depending on the employee’s tax situation.
Important:
This calculator is provided for informational and estimation purposes only. Actual payroll tax withholdings may vary based on an employee’s tax elections, payroll setup, and other factors. Employers should consult a qualified tax, legal, or payroll professional for official calculations. If you need assistance with payroll processing or tax compliance, the Beyond team is available to help.