What is supplemental payroll?

Supplemental payroll refers to any additional payments made to an employee outside of their regular wages or salary. These payments may include bonuses, commissions, overtime, or any other form of extra compensation.

Supplemental payroll is typically used to reward employees for exceptional performance, meet certain sales targets, or compensate for additional hours worked. It can also include one-time payments or incentives for specific projects or achievements.

Supplemental payroll is often taxed differently from regular income. In the United States, for example, these payments may be subject to different tax withholding rates or be considered as a separate category of income. Employers may also need to report the supplemental payroll separately on tax forms such as W-2s.

Employers typically have their own policies and guidelines for determining the criteria and amount of supplemental payroll. They may establish eligibility criteria, such as a minimum tenure or performance standards, and set specific amounts or percentages for different types of supplemental payments.

In summary, supplemental payroll refers to additional payments made to employees beyond their regular wages or salary. It is often used to reward exceptional performance or compensate for additional work, and may be taxed differently from regular income.