Aggregate
For supplemental wages paid with normal wages, calculate withholding (using the annualized method) as if the aggregate of supplemental and normal wages were a single wage payment for the normal payroll period.
Example for Payment with Regular Wages
A Maine employee, single with one allowance, is paid a $1000 bonus on the same paycheck as his normal weekly earnings of $500:
| Term | Definition |
|---|---|
|
Normal Wages |
$500.00 |
|
Supplemental Wages |
1,000.00 |
|
Total Wages |
1,500.00 |
|
Annualized (x 52) |
$78,000.00 |
|
Annual Maine Tax |
5,720.75 |
|
Tax to Withhold (/52) |
110.01 |
For supplemental wages paid separately from normal wages, calculate withholding by aggregating supplemental wages with normal wages from the current payroll, if any, or with any other wages paid (confirmed checks only) in the prior on-cycle period. Using the annualized method, compute the tax on the combined total. Subtract the annualized tax on the normal wages. The deannualized remainder is the withholding on the supplemental wages.
Note:
If the employee has not been paid any annualized wages this year, the supplemental earnings will be taxed at the employee's pay frequency specified on the pay group table. If there are multiple supplemental earnings for the same period (earnings paid in the same on-cycle timeframe), compute the tax on the combined total. Subtract the annualized tax on the wages paid in that period. The deannualized remainder is the withholding on the current supplemental wages.
Example for Separate Payment
A Maine employee, single with one allowance, is paid a $1000 bonus as a separate check. No normal wages are paid in the current payroll. The employee's last previous on-cycle confirmed paycheck in the current year was for normal weekly earnings of $500:
| Normal Wage | Item | Reg + Bonus |
|---|---|---|
|
$26,000.00 |
Annualize Gross Wages |
$78,000.00 |
|
1,300.75 |
Annual Tax |
5,720.75 |
|
Annualized Tax on Normal Wages |
(1,300.75) |
|
|
Remainder |
4,420.00 |
|
|
Tax to Withhold on Bonus (/52) |
85.00 |
Multiple Supplemental Wage Payments
The aggregate method accumulates all supplemental wage payments made after the last regular wage payment to perform tax calculations.
For example, if an employee is paid on a monthly payroll cycle on the first day of each month and the employee is also paid supplemental wages throughout the month, the system considers the employee’s regular wages and the supplemental wages paid throughout the month when computing withholding using the aggregate method.
For example, Frank Smith is paid regular wages of $2000 on July 1, commissions of $500 on July 5, commissions of $400 on July 15, and commissions of $600 on July 25. When calculating the withholding on the July 25 payment using the aggregate method, the system adds the $600 paid on July 25, the $400 paid on July 5, the $500 paid on July 15 and the regular wage amount of $2000 paid on July 1 to determine the true tax bracket for the monthly payroll period.