Why is commission taxed so high

If you're in sales—for example, as an insurance agent—when you hear the phrase "sales commission," you probably see dollar signs. And for good reason!

Irs commission tax rate

After all, you probably earn a commission when you meet or exceed a sales goal, which can be a great incentive to push yourself to close more deals.

But how much of that commission do you actually get to keep? By definition, sales commissions are supplemental wages—meaning that they're wage payments outside of your regular earnings.

And because of that, it can be a little bit tricky to determine how this commission is taxed.

From tax forms to employment types, let's take a deep dive into how sales commissions and taxes work—including how to determine how much of your commissions will ultimately go to taxes.

How Commission is Taxed as an Employee

The Internal Revenue Service (IRS) considers commissions to be supplemental wages—and, if you're an employee, there are a few different ways those wages can be taxed.

• Taxed with regular pay: If your commission is included in your regular pay, then it&#
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