Does Commission Get Taxed?

A commission is considered a “supplemental wage” by the Internal Revenue Service (IRS). ... If you receive it outside your regular paycheck, then it becomes supplemental and your commission is taxed at a rate of 25%. Employers are still required to withhold Social Security and Medicare from these wages too.

Is commission taxed at a higher rate?

Both salary and commissions are taxable income. You report them on your tax return and your taxable income (after deductions and exemptions) are taxed according to your filing status and your tax bracket. So the short answer is that salary and commissions are taxed at the same rate.

Is a commission taxable?

Bonuses and commissions paid or payable to an employee are defined as wages, and are therefore liable for payroll tax. These payments are either included in the employee's gross wages or shown separately on the employee's PAYG withholding statement.