Know when wage payments should be classified as supplemental and the applicable withholding rules that apply.
To recruit and retain the best staff, employers must be competitive (and creative) with total compensation packages. The United States Department of Labor (U.S. DOL) allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the required exempt salary level of $684 per week (or $35,568 per year for a full-year worker). That is one example of the many ways supplemental wages can be an excellent resource for employers to incentivize employees as well as augment their wages. If managed correctly, supplemental wages, as part of a total compensation package, can be an effective talent recruiting, staff retaining, and marketing tool. As with all human capital management, an appreciated and valued employee is a happy employee. Happy employees provide better service to clients. Better serviced clients stay clients.Learning Objectives
- You will be able to define supplemental wages and how they are different from regular wages.
- You will be able to describe the process for correctly withholding federal income taxes.
- You will be able to explain how you can gross-up an employee’s pay to cover the taxes due and the required taxes if you choose to do so.
- You will be able to discuss how you determine the taxable amount of a supplemental wage payment.
Agenda
Defining Supplemental Wages- The Internal Revenue Service (IRS) Publication 15-B
- The United States Department of Labor (U.S. DOL)
- The Employee Handbook
- Cash vs. Fair Market Value
- Determining the Taxable Amount
- Determining Rate
- Grossing-up Taxes
- Other Considerations (Pensionable, Other Benefits)
- Communicating to the Employee
Speaker(s)
Tricia Richardson, CPP, SPHR, SHRM-SCPPurposed Payroll Professional
- Consultant, Kapla Consulting
- Over 25 years of experience in all aspects of workforce management (payroll processing, taxation, employee handbooks, human resources, benefits, etc.)
- Certified Payroll Professional (CPP) through PayrollOrg (formerly the American Payroll Association), Senior Professional in Human Resources (SPHR) through the HR Certification Institute, and a Society for Human Resource Management Senior Certified Professional (SHRM-SCP)
- Member of the National Speakers Bureau and Government Relations Task Force (Federal and State/Local) for PayrollOrg and a former contributing writer for Paytech Magazine
- Serves as the treasure of a York County Pennsylvania Non-Profit Association
- Involved locally through the Susquehanna Valley Chapter of the American Payroll Association, having served in various roles on the board of directors and as a contributor to the certification study groups
- B.S. Degree in management studies, University of Maryland University College
