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Why would bonuses, which are 1) Taxed higher than income most of the time, and 2) Not guaranteed to happen, be more of a motivator than salary?
by st3v3r 10y ago
Why would bonuses, which are 1) Taxed higher than income most of the time, and 2) Not guaranteed to happen, be more of a motivator than salary?
- dragonwriter 10y agoBonuses aren't taxed higher. They are, when paid separately, subject to a different (flat) withholding rate, which is often higher than your average withholding rate and, when paid together, they are subject to a higher withholding rate than your average withholding rate because regular withholding rates are shaped by progressive tax structure. They are actually just regular taxable income, and are taxed exactly the same as additional non-bonus income.