The employee and employer must both pay social security taxes on cash wages. The employee must pay state and federal income taxes on cash wages. Agricultural employers are responsible for withholding social security taxes and federal and state income taxes from the cash wages of their employees. Vacation Pay Vacation pay is the amount employers pay their employees while their employees are on vacation. Giving vacation pay to farm employees rewards them for hours worked throughout the year and puts them on an equal footing with non-agricultural workers who frequently receive vacation pay.
Vacation pay is considered regular wages for taxation purposes.
Though overtime pay is not normally a state or federal requirement under the current labor laws regarding agriculture, it may be a very simple way to reward employees for working long days. It is a type of incentive pay that gives the employee more than the normal wage for hours worked over a certain, specified minimum during any week. The per hour increase in wages and number of hours at which overtime wages begin are left to the employer's discretion in most agricultural situations. Bonuses Bonuses paid to employees are considered wages paid and taxed as such. Bonuses can be used to reward employees for their contribution to a successful year for the farm.