Why your commission looks over-taxed
Most employers withhold commissions at a flat 22% federal rate plus 7.65% FICA and Maine state tax. That can be more — or less — than your real rate. On a $75k salary, a $10,000 commission in Maine actually costs about $3,666 in tax, so part of the withholding often comes back at filing.
Planning around a big payout
If the flat withholding is higher than your real rate, you will get the difference back as a refund. If you are near a bracket line, run the numbers above — a large payout can push some dollars into a higher bracket.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
How much tax will I pay on my commission?
At a $75k salary in Maine, roughly $3,666 on a $10,000 commission — about 36.7%. The exact figure depends on your total income; use the calculator above.
Why is my commission taxed at 40%?
It usually is not — the flat 22% federal withholding plus FICA and state tax can look like 35–40% coming out, but the withholding is a prepayment. Your real rate is set by your annual income and any over-withholding comes back as a refund.
Can I reduce the tax on my commission?
Increasing your 401(k) or HSA contribution in the same pay period shelters part of the payout from income tax. Ask payroll whether you can direct a portion straight to pre-tax accounts.
Bonuses are withheld differently from regular pay — the bonus tax calculator uses the 22% supplemental rate.
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