How commissions are taxed in 2026
Commission is taxed as wages. If it is paid separately from your regular pay, the employer can withhold a flat 22% federal rate, plus FICA and state tax.
Two ways employers withhold
Commission paid with regular wages is added to the paycheck and taxed by the usual method. Commission paid separately is supplemental wages. The employer may withhold a flat 22% federal rate, or use the aggregate method, which adds it to regular pay for the period and withholds on the total.
Social Security (6.2%) and Medicare (1.45%) apply either way. State rules differ; many states use a flat supplemental rate. Check yours on the state calculators.
Example
A $3,000 commission check withheld at the flat method: $660 federal, $229.50 FICA, plus state tax. Use the bonus tax calculator for the same math with your state, because commission and bonus use the same supplemental rules.
Watch it worked through
- How Commissions Are Taxed: No Special Rate #shorts (YouTube Short)
Paycheck Zip videos use the same calculator as this page. Figures in a video are from the day it was made; the page is kept current.
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Questions
What percent is commission taxed?
22% federal income tax if paid separately and the employer uses the flat method, plus 7.65% FICA and any state tax. The 22% is withholding, not your final rate.
Is commission taxed more than salary?
No. The tax at filing is on total income. Withholding on a separate check can be higher or lower than the final result.
What if commission is on the regular paycheck?
Then it is added to regular wages and withheld with the percentage method like normal pay.
Does 1099 commission work the same?
No. Independent contractors pay self-employment tax and estimated tax themselves. This guide covers employees.