HR Glossary
Supplemental Income

Supplemental Income

Updated on:
August 22, 2022


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Table of Content

What is Supplemental Income?

Supplemental Income is income generated by outside of their regular sources of income, it usually refers to income that is generated by non-primary sources, They include overtime, bonuses, commission, and more.

Supplemental income can be generated by additional businesses that you operate in addition to your primary business. For example, if you operate a restaurant and you own a catering company, your additional income (or supplemental income) from catering work would be considered supplemental income from the restaurant, Income from work you perform for a side job or on a freelance basis also may be considered supplemental income.

What are the conditions for something to be considered a supplemental wage? And what would exclude it from being a supplemental wage?

The following is considered a supplemental wage:

  • Bonuses
  • Commission
  • Tips
  • Overtime pay
  • Accumulated sick leave
  • Severance pay
  • Awards Prizes
  • Payments for non-deductible moving expenses
  • Back pay
  • Retroactive pay increases

The following generally exclude supplemental wages:

  • Stipends
  • Paid time off
  • Vacation pay