How Do I Report Income from Commission Earnings on a W-2 Form?

Report your employees’ commission income, in most cases, in box 1 on a W-2 form. Treat the commissions like wages when you withhold and pay taxes for the business. You must pay regular employment taxes on the wages, such as Social Security and Medicare taxes.

You may choose to combine an employee’s salary and their commission into a single payment if they earn both. Otherwise, identify an employee’s commission payment as separate from their regular wages. Know the withholding method options depending on which course of action you take. The first option requires you to withhold a flat rate of 22% from an employee’s commission payment. The second choice requires you to combine regular and supplemental wages before you use the total amount to withhold the income tax, with the IRS Publication 15T brackets.

We handle income form generation and reporting programmatically with our W-2/1099 software and optional add-on Software Generated Forms module. Download our free demo software to learn how our base program and six optional modules complement each other for your efficient tax and payroll preparation.

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.