Alaska PBP Paystub is Up

[CesnaCaptn]

Actually the new target is $475 mil. Last year we made $516 mil profit (according to the formula that counts.)

Thanks for the clarification. Accounting (or reading for that matter) has never been my strong suit.

 

[AK737FO]

The board has already pushed next years goals into the dream world. The "stretch goals" being meet are where we as employees get to make some money. Those stretch goals are now set at an unachievable level. We will never again see PBP checks as big as this years. Enjoy it for today, because it will not ever be seen again. ALPA was once again right, by making sure that our pay was not at all tied to Profit Sharing - that can be changed by the board - once the "sharing" gets to big.

I'm pretty sure that I am in the 28% tax bracket. Why was 32% taken out of my PBP check?

 

[mach none]

IRS considers it as EXTRA income. It is taxed at a different rate. Don't worry, it will go to a could cause.

 

[ImbracableCrunk]

Could cause what?

 

[Old School 737]

This was on the water cooler today!!!


Q. I was very surprised to see the amount of taxes taken out of my PBP check.
Normally I see approximately 11% deducted for my regular paycheck however
for the PBP check I calculate 31% in tax deductions. Is this correct and
is everyone receiving PBP paying these outrageous taxes on our bonuses?

A. Yes, the taxes withheld on your PBP check are correct. Keep in mind that your total taxes for 2011 will ultimately be determined by your total earnings and individual tax circumstances, not by how much is deducted from a particular paycheck. For those employees who have more tax taken out than they ultimately owe, they'll simply get a higher refund when they file their 2011 tax returns.

We are complying with IRS regulations that require us to tax separate bonus payments at a 25% "supplemental" income tax rate. This same method was used for all employees. The supplemental 25% rate, plus FICA and Medicare taxes, add up to 30.65% of total federal taxes withheld. State and local taxes are also withheld, if applicable. We should have used this approach last year, so many employees may be surprised by the increase in the amount deducted from their payouts. Again, your individual tax situation will determine if the taxes taken out are too much or too little once you file your 2011 return.

If you believe you need to adjust your W-4 tax information to have less or more taxes taken out for the rest of the year, you can log into PeopleSoft Self Service and update your W-4 information.


So the company messed up last year and did not take enough out??

 

[Boxboy]

This was on the water cooler today!!!


Q. I was very surprised to see the amount of taxes taken out of my PBP check.
Normally I see approximately 11% deducted for my regular paycheck however
for the PBP check I calculate 31% in tax deductions. Is this correct and
is everyone receiving PBP paying these outrageous taxes on our bonuses?

A. Yes, the taxes withheld on your PBP check are correct. Keep in mind that your total taxes for 2011 will ultimately be determined by your total earnings and individual tax circumstances, not by how much is deducted from a particular paycheck. For those employees who have more tax taken out than they ultimately owe, they'll simply get a higher refund when they file their 2011 tax returns.

We are complying with IRS regulations that require us to tax separate bonus payments at a 25% "supplemental" income tax rate. This same method was used for all employees. The supplemental 25% rate, plus FICA and Medicare taxes, add up to 30.65% of total federal taxes withheld. State and local taxes are also withheld, if applicable. We should have used this approach last year, so many employees may be surprised by the increase in the amount deducted from their payouts. Again, your individual tax situation will determine if the taxes taken out are too much or too little once you file your 2011 return.

If you believe you need to adjust your W-4 tax information to have less or more taxes taken out for the rest of the year, you can log into PeopleSoft Self Service and update your W-4 information.


So the company messed up last year and did not take enough out??

So, does the company pay these taxes immediately to the IRS or later when they do their taxes? My guess is later. hmmmmmmm.

 

[Mookie]

Remember the 44 still out when y'all spend this scratch...

Mookie

 

[Old School 737]

Spend it all Hell!!! It was spent years ago when I was a first year FO at 2 airlines.

 

[igneousy2]

Not sure why everyone is making such a big deal about it.

http://www.irs.gov/individuals/article/0,,id=96196,00.html

Go to the IRS witholding calculator. It tells you what you need to claim on your W-4 for the remainder of the year so that you end up owing zero. It has worked pretty well for me...just don't forget to do it again at some point next year, especially when the bonus doesn't turn out to be quite as large.

 

[charlieB]

Alaska conveniently "forgot" to extract alpa dues from the bonus. A bonus is so obviously "dues-able" income that I question whether this was actually a mistake. Hey, let's force alpa to inflame their constituents through a special announcement that they would have to extract everybody's bonus dues over the next 2 month's paychecks.
Airlines loathe their unions.