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Wages subject to federal employment taxes generally include all you give to an employee for services performed.

The pay may be in cash or in other forms.   It includes salaries, vacation allowances, bonuses, commissions, and taxable fringe benefits. It doesn't matter how you measure or make the payments.  Amounts an employer pays as a bonus for signing or ratifying a contract in connection with the establishment of an employer-employee  relationship and an amount paid to an employee for cancellation of an employment contract and relinquishment of contract rights are wages subject to social security, Medicare, and FUTA taxes and income tax withholding. Also, compensation paid to a former employee for services performed while still employed is wages subject to employment taxes.

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