Taxation percentages

Supplemental wages

The Postal Service is reminding employees that the percentages used to tax supplemental wages differ from normal taxation percentages.

Supplemental wages can include:

  • Annual leave exchange
  • Awards
  • Back-pay awards
  • Prizes
  • Severance pay
  • Reimbursements for nondeductible moving expenses

Supplemental wages are subject to a withholding rate of 22 percent. Congress and the IRS determine taxation percentages.

The Postal Bulletin’s Feb. 1 edition has more information.