Flat Tax Withholding is a method where a fixed percentage of an employee’s income is withheld for federal income tax, regardless of income level, applied in certain situations like supplemental wages.
- What is flat tax withholding?
Answer: It is a fixed percentage withheld from income for federal tax, used for supplemental wages. - What is the current flat withholding rate?
Answer: As of 2025, it is 22% for supplemental wages under $1 million. - When is flat tax withholding applied?
Answer: It applies to bonuses, commissions, or other supplemental pay. - How does it differ from regular withholding?
Answer: Regular withholding varies by income and W-4, while flat is a uniform rate. - What are the employer responsibilities?
Answer: Employers must apply the rate and remit funds to the IRS.
