Bonus Tax Calculator
A Bonus Tax Calculator is a tool that estimates how much federal, state, and FICA tax is withheld from a bonus payment. Enter your bonus amount and base salary to see your net take-home bonus. Most employers withhold a flat 22% federal tax on bonuses under $1 million, per IRS supplemental wage rules.
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How Bonus Tax Withholding Works
Bonuses are supplemental wages. Your employer must withhold federal income tax, and usually Social Security and Medicare, just like regular pay. The difference is how federal withholding is calculated. Many companies use the IRS flat 22% supplemental rate on the bonus line when it is paid separately from your normal paycheck. State income tax may also apply depending on where you live and work.
Withholding is not the same as your final tax bill. When you file your return, bonuses are taxed as ordinary income alongside salary. If too much was withheld, you get a refund; if too little, you owe. Use this bonus tax calculator to estimate your take-home bonus before you spend it, and compare scenarios with our paycheck calculator.
Sources: IRS Publication 15, IRS Publication 15-T.
The 22% Supplemental Wage Rule Explained
IRS rules let employers withhold federal income tax at a flat 22% on supplemental wages — including bonuses, commissions, overtime pay, and severance — when those amounts are not combined with regular wages in the same check. For bonuses over $1 million in a calendar year, the required flat rate is 37%. The 22% rate is withholding only; your actual marginal rate on the bonus may be higher or lower when you file.
Example: a $10,000 bonus with flat federal withholding loses $2,200 to federal tax before FICA and state tax. Add roughly $765 FICA (7.65% on most bonuses under the wage base) and state tax in California or New York, and net take-home often lands near $6,000–$7,000 — not the full $10,000.
See official federal tax brackets for how bonuses fit into your annual return.
The Aggregate Method vs. Flat Rate Method
Flat rate method: Bonus is taxed at 22% federal (or 37% over $1M) plus FICA and state tax. Simple and common for year-end lump sums paid on a separate check.
Aggregate method: Employer adds the bonus to your regular wages for that pay period and runs normal withholding tables based on your W-4. If your regular check is small relative to the bonus, withholding can spike because the tables assume that pay rate every period. If combined pay is modest, aggregate withholding can be lower than 22%.
This calculator models the flat supplemental method — the most common for standalone bonus payments. Ask payroll which method they use if your stub looks different.
Does a Bonus Push Me Into a Higher Tax Bracket?
Bonuses can push more of your annual income into higher marginal brackets, but only the dollars above each threshold are taxed at the higher rate — not your entire income. The myth that a bonus is taxed at 100% of your top rate is wrong. What you feel immediately is withholding, which may feel high because of the 22% flat rate stacked with FICA and state tax on one check.
If your total income including the bonus stays in the 22% federal bracket, your true federal liability on the bonus might be close to the amount withheld. High earners in the 32% or 35% brackets may owe more at filing time if only 22% was withheld. Lower earners may get a refund if 22% exceeded their marginal rate.
Use our salary calculator to see whether your total compensation is competitive before bonus season.
How to Reduce Tax on Your Bonus (5 Legal Ways)
- Defer into 401(k). If your plan allows bonus deferral, contributing pre-tax dollars lowers taxable wages. Check your plan's limits and match rules.
- Max out HSA or FSA. Pre-tax health and dependent care accounts reduce taxable income when funded from bonus or salary.
- Time charitable gifts. Donating appreciated stock or cash in the same tax year can offset income if you itemize.
- Adjust your W-4. If you consistently get large refunds, you may be over-withheld on bonuses too. The IRS withholding estimator helps align settings.
- Invest in earning power. Bigger bonuses follow stronger performance. Refresh your resume with our resume builder and test fit with the job match score.
Bonus Tax Calculator Examples ($5K, $10K, $25K Bonuses)
Single filer, 22% federal supplemental withholding, estimated state tax, FICA. $75,000 base salary unless noted.
| Bonus | Base salary | State | Net take-home | Effective rate |
|---|---|---|---|---|
| $5,000 | $75,000 | TX | $3,518 | 29.7% |
| $10,000 | $75,000 | TX | $7,035 | 29.7% |
| $25,000 | $75,000 | TX | $17,588 | 29.7% |
| $10,000 | $75,000 | CA | $6,223 | 37.8% |
| $10,000 | $75,000 | NY | $6,485 | 35.2% |
Methodology
Federal bonus withholding uses the 22% supplemental wage rate from IRS Publication 15-T (37% over $1 million). State tax is estimated as the marginal increase in annual state tax when the bonus is added to base salary, using 2026 state rates and brackets. FICA uses the incremental Social Security and Medicare on the bonus amount, respecting the $184,500 Social Security wage base and Medicare surtax thresholds. Update rates annually.
Aggregate-method employers may withhold differently. This tool does not replace advice from a CPA or your payroll department.
Frequently Asked Questions
Most employers withhold federal income tax at 22% on supplemental wages like bonuses (37% on amounts over $1 million). You also pay Social Security (6.2% up to the annual wage base) and Medicare (1.45%, plus 0.9% surtax on high earners). State income tax applies in most states. Total withholding often lands between 30% and 40% depending on salary, state, and whether you have already hit the Social Security wage cap.
Withholding is often different even though bonuses are taxed as ordinary income on your annual return. Regular paychecks use W-4 tables; bonuses commonly use the 22% flat supplemental rate or the aggregate method that combines bonus with regular wages. Your actual tax liability is calculated when you file — withholding is an estimate.
The IRS allows employers to withhold federal income tax at a flat 22% on supplemental wages such as bonuses, commissions, and severance when those payments are identified separately from regular wages. See IRS Publication 15-T. It is a withholding shortcut, not your final tax rate.
A bonus can push more of your total annual income into higher marginal brackets when you file taxes. That does not mean the entire bonus is taxed at your top rate — only dollars above each bracket threshold are. Withholding at 22% may be more or less than your true marginal rate depending on total income.
Legal options include maximizing pre-tax 401(k) contributions (including bonus deferral if your plan allows), donating to charity, timing deductions, and adjusting your W-4 if you consistently over-withhold. Some employers let you defer bonus into the next calendar year. Consult a CPA for your situation.
In most states with income tax, yes — bonuses are wages. Nine states have no wage income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. City taxes may apply in places like New York City or Ohio municipalities.
The calendar year matters for your W-2 and annual tax return, not the month. A December bonus counts toward the same tax year as January wages. Withholding rates are the same unless crossing the Social Security wage base or Medicare surtax threshold changes within the year.
Under the aggregate method, your employer combines the bonus with your regular wages for that pay period and withholds federal tax as if it were all ordinary wages using your W-4 and IRS tables. That can produce higher or lower withholding than the 22% flat rate depending on your pay and exemptions.
Sources
Disclaimer
Estimates only. Not tax advice. Consult a CPA. Actual withholding depends on your employer's payroll method and your W-4.
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Last updated: September 2026
By Peter Miller