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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I am a teacher in Florida. I will be recieving a bonus of

Customer Question

I am a teacher in Florida. I will be recieving a bonus of $4000 dollars. How much tax do they take off? Is there such a thing as luxury tax? Would this bonus be considered a luxury?

Thank you!

confused teacher
Submitted: 6 years ago.
Category: Tax
Expert:  Merlo replied 6 years ago.

Hello jenny,


A bonus you receive from an employer is not considered a luxury. Luxury tax is something that may be imposed in certain countries on a non essential luxury item, such as an expensive car or jewelry.


Your bonus check is considered by the IRS to be supplemental wages. In other words, it is a larger one time lump sum payment than what you would get on your normal paycheck. Most employers tax supplemental pay using a flat federal withholding rate of 25% although they could also continue to figure withholding based on how you have filled out your current W-4 form.


In addition to the federal withholding, SS and Medicare taxes will still apply for a total of 7.65%. So if your employer chooses the 25% federal withholding method and then withholds another 7.65% to cover SS and Medicare taxes, they should withhold a total of around $1,306 from this bonus.


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Thank you jenny