Why your commission check is smaller than the math
US employers may withhold federal income tax on separately paid commissions at a flat 22% (37% on supplemental wages above $1 million in a year), plus 7.65% Social Security and Medicare, before any state tax. That is withholding, not the tax you finally owe.
The IRS treats commissions and bonuses as supplemental wages. When they're paid separately from salary, employers can withhold federal income tax at a flat rate instead of running them through the normal tables. Social Security and Medicare come out on top, then your state, if it has an income tax.
Federal withholding and payroll tax, before state
| Gross commission | Federal (22%) | Social Security + Medicare (7.65%) | Left before state tax |
|---|---|---|---|
| $10K | $2,200 | $765 | $7,035 |
| $25K | $5,500 | $1,912 | $17,588 |
| $50K | $11,000 | $3,825 | $35,175 |
| $100K | $22,000 | $7,650 | $70,350 |
Assumes supplemental wages under $1 million for the year and earnings under the Social Security wage base. Above the wage base, the 6.2% Social Security portion stops; above $200,000 in wages, an extra 0.9% Medicare applies.
That's where the rough 30% figure comes from: 22% plus 7.65% is 29.65% before any state tax. It's why Commission Check starts its set-aside at 30% for a W-2 seller.
What this is not
Withholding is an estimate collected in advance. What you actually owe is settled when you file, and depends on your bracket, your state, your filing status and everything else you earned. A 1099 contractor has nothing withheld at all. None of this is tax advice; for anything that matters, ask an accountant.
Commission Check estimates your take-home on a deal with a set-aside you can change.
Try itSources
- IRS, Publication 15 (2026), Employer's Tax Guide: supplemental wage withholding at 22%, or 37% on supplemental wages above $1 million in the calendar year.
- Social Security (6.2%) and Medicare (1.45%, plus 0.9% Additional Medicare Tax above $200,000) are the standard employee payroll tax rates described in the same publication.
Cite this page: QuotaBird, "Why your commission check is smaller than the math," quotabird.com/math/commission-take-home/ (updated 2026-10).
