Tax withholding is based on all wages paid during a week; therefore, if you receive multiple payments dated during the same week ending, your tax withholdings will be based on the accumulation of wages paid during that entire week.
For example, each subsequent pay after the initial pay in that week will take into account all prior amounts paid. Taxes will be recalculated to ensure that tax withholding obligations are fulfilled based on the total wages PAID in a pay period.
Any supplemental payments, such as any type of bonus or commission, will be taxed at the IRS supplemental rate of 22%.
Payroll Tax Deferral Update
On August 9, the President issued an executive order allowing deferral of payroll tax withholding from September 1 to December 31, 2020. This deferral applies only to an employees’ portion of the Social Security payroll tax.
Kelly has reviewed the IRS guidance on this issue and also taken into consideration that participating in the deferral would require employees to pay back their portion between January 1 and April 30, 2021, through extra payroll deductions. Due to this potential hardship, most companies, including Kelly, will continue withholding payroll taxes. We will continue to monitor the situation, and if further guidance or law changes reduce the employee risk, we will provide an update to you.
If you have questions, please contact the Employee Service Center at 1-866-KELLY-4U (1-866-535-5948) or complete the online form.