---
title: "Supplemental Wage Tax Configuration"
slug: "supplemental-wage-tax-configuration"
description: "Configure Restaurant365 supplemental wages in Company Tax Profile with Flat rate or Aggregated withholding; applies to on-cycle pay runs, not off-cycle runs."
updated: 2026-10-05T16:47:26Z
published: 2026-10-05T16:47:26Z
canonical: "docs.restaurant365.com/supplemental-wage-tax-configuration"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://docs.restaurant365.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Supplemental Wage Tax Configuration

Supplemental wages are wages paid outside an employee's regular or salary wages, such as bonuses, commissions, overtime, and other one-time payments.

Restaurant365 allows a payroll company to choose how supplemental wages are taxed by default, using the Default Supplemental Tax Method field on the [Company Tax Profile](/doc/docs/workforce-settings-company-tax-profile) page. This setting determines whether supplemental wages are taxed using a flat federal rate or based on the employee's current withholding elections.

---

## Security

Users with the following permission will be able to access and edit the Company Tax Profile page:

- Payroll
  - R365 Payroll
    - Company Tax Profile
      - View Company Tax Profile
      - Edit Company Tax Profile

---

## Navigation

The supplemental wage tax configuration is done on the Company Tax Profile page.

****Navigation Steps****

1. Open the **Payroll** app.
2. Expand **Taxes**.
3. Click **Company Tax Profile.**

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-8BKEZP6J.png?sv=2026-02-06&spr=https&st=2026-11-10T17%3A10%3A02Z&se=2026-11-10T18%3A10%3A02Z&sr=c&sp=r&sig=Ehog3dcLNhdoP7QATpyrGOequPQSFsWYxbazlNElDYI%3D)

****Search****

Navigate to pages with the [R365 global search bar](/doc/docs/r365-search):

1. Enter all or part of the **page name** in the R365 global search bar.
2. Select the page from the results list.

> Only enabled pages can be searched for. If the desired page is not enabled, contact your CSM for assistance.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-1745007955784.png?sv=2026-02-06&spr=https&st=2026-11-10T17%3A10%3A02Z&se=2026-11-10T18%3A10%3A02Z&sr=c&sp=r&sig=Ehog3dcLNhdoP7QATpyrGOequPQSFsWYxbazlNElDYI%3D)

---

## Flat Rate vs. Aggregated

- **Flat rate — 22% federal withholding** applies the IRS standard flat rate of 22% to federal supplemental wages, and 37% to the portion of an employee's supplemental wages that exceed $1,000,000 in a calendar year. State supplemental wages are taxed using the employee's current effective rate. Flat rate is the default supplemental tax method.
- **Aggregated — use employee's current effective rate** combines the supplemental payment with the employee's regular wages for the pay period to determine the withholding rate, based on the employee's current W-4 elections, for both federal and state taxes.

> [!NOTE]
> This setting is different from the Tax Method option available when creating an off-cycle pay run. Off-cycle pay runs use their own Tax Method selection (Supplemental or Employee Elections) and are not affected by the Default Supplemental Tax Method field.

---

## Setting the Default Supplemental Tax Method

****1)** On the **Company Tax Profile** page, click the edit button next to **Default Supplemental Tax Method**.**

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-MB7XDB04.png?sv=2026-02-06&spr=https&st=2026-11-10T17%3A10%3A02Z&se=2026-11-10T18%3A10%3A02Z&sr=c&sp=r&sig=Ehog3dcLNhdoP7QATpyrGOequPQSFsWYxbazlNElDYI%3D)

****3)** Select the supplemental tax method.**

Options include: **Flat rate — 22% federal withholding** or **Aggregated — use employee's current effective rate**.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-L5YTJ25J.png?sv=2026-02-06&spr=https&st=2026-11-10T17%3A10%3A02Z&se=2026-11-10T18%3A10%3A02Z&sr=c&sp=r&sig=Ehog3dcLNhdoP7QATpyrGOequPQSFsWYxbazlNElDYI%3D)

****4)** Click **Save**.**

The Save button will be enabled when a change is made.

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-1FRAQ8IZ.png?sv=2026-02-06&spr=https&st=2026-11-10T17%3A10%3A02Z&se=2026-11-10T18%3A10%3A02Z&sr=c&sp=r&sig=Ehog3dcLNhdoP7QATpyrGOequPQSFsWYxbazlNElDYI%3D)

---

The Default Supplemental Tax Method field applies to on-cycle pay runs only. Off-cycle pay runs are not affected by this setting.