re: Withholding question

quote:

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If it’s included in regular checks it can be treated as regular income

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I've been here 16 years and that isn't the case.

For the first 14 years, commissions from the 1-15th got paid the following month on first monthly paycycle (26 annual checks). Commissions from 16th to EOM paid on second monthly paycycle. All comp is included on each paycheck (it is never a special paycheck for commission). Commission withholdings have been 25% the entire time.

Today, all commissions get paid on the second monthly paycycle the following month. The company is looking to institute a draw on the first monthly paycycle to help newer employees with budgeting. Today, all commissions have a 25% withholding. The expectation is that the draw (when it starts) will not have that same withholding.

I apologize for the confusion. I figured "both ways" was getting 2 commission paychecks each month versus getting 1 commission paycheck each month (despite 26 annual paychecks total).

It isn't the paycycle that dictates the IRS required withholdings. It is the type of compensation (i.e. bonus income, commission income, etc..)