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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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If we have a sales person we pay a salary plus commission to

Resolved Question:

If we have a sales person we pay a salary plus commission to do we have to take taxes out of the commission check or can we cut it and let him be responsible for the taxes?
Submitted: 8 years ago.
Category: Tax
Expert:  Lev replied 8 years ago.

Assuming the person works for you as an employee - any compensation for the service is generally considered wages - and you are required to withhold employment and income taxes.

 

If commissions are supplemental wages - you need to select the way to determine income tax withholding (that should be the same for all employees):

--- the commission amount is added to regular wages and withholding is determined based on W-4 filing

--- withhold from any supplemental wages including the commission payments at flat 25% rate.

 

Please see IRS publication 15 for more details and withholding tables - http://www.irs.gov/pub/irs-pdf/p15.pdf

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