One time payments to Civilian Personnel are taxed at what rate?

• A. 0%
• B. 10-15%
• C. 30-40%
• D. 20-28%

Answer: (D)

One-time payments to civilian personnel are treated as supplemental wages and are withheld at the supplemental tax rate. This means they don’t follow the regular payroll withholding rate the employee normally experiences, but instead get taxed at a higher flat rate appropriate for bonuses or unusual payments. In practice, the withholding for these supplemental payments falls within the 20–28% range, which is why that option is correct. The other ranges don’t match how supplemental wages are treated: 0% would imply no tax, 10–15% is too low for supplemental withholding, and 30–40% is higher than standard supplemental wage withholding.