What Is a Bonus?
A bonus is compensation paid to an employee in addition to regular salary or wages, often tied to company or individual performance, or given as a signing, retention, or holiday payment. Bonuses count as taxable income; in the United States they are considered supplemental wages for withholding purposes.
Withholding
Employers may withhold federal income tax on supplemental wages at a flat rate or combine them with regular wages; the final tax is settled on the annual return.
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🔗 Related Terms
More Income & Work Terms
- Billable Hours
- Billable Utilization Rate
- Business Overhead
- Cost to Company (CTC)
- Cost-of-Living Adjustment (COLA)
- Day Rate
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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.