See how much of your work bonus you actually keep after supplemental withholding.
How to Use the Bonus Tax Calculator
Bonuses look generous on paper and disappointingly small in your bank account. That is because the IRS treats them as supplemental wages with special withholding rules. This calculator shows what you will actually keep.
- Enter your gross bonus amount — the figure your employer announced.
- Enter your state withholding rate as a percentage. If your state has no income tax, leave it at 0.
- Calculate. The tool applies the federal supplemental withholding rate of 22 percent (37 percent if the bonus is over $1 million) plus 7.65 percent for Social Security and Medicare.
- See the federal withholding, FICA, state tax, and your net bonus after all deductions.
Bonus Tax Formula
The IRS classifies bonuses as supplemental wages, and employers must withhold federal income tax at a flat 22% on the first $1 million of supplemental wages in a year — 37% on amounts above $1 million. This flat withholding often differs from your actual marginal tax rate, which is why bonuses feel over-taxed: a worker in the 12% bracket still sees 22% withheld upfront, though the difference comes back as a larger tax refund.
FICA applies too: Social Security takes 6.2% up to the annual wage base ($184,500 for 2026), and Medicare takes 1.45% of the full bonus plus 0.9% on high earners. State withholding follows your state’s rules — some states use their own flat supplemental rates. Your true tax on the bonus is ultimately your marginal rate, not the withholding rate; withholding is just a prepayment. If your marginal rate is below 22%, you effectively gave the IRS an interest-free loan until refund time.
Percentage Method vs Aggregate Method
The 22 percent figure above comes from what the IRS calls the percentage method: when a bonus is paid separately from regular wages and clearly identified as supplemental, the employer simply withholds a flat 22 percent (37 percent on the portion of supplemental wages above $1 million in a year). It ignores your W-4 entirely — filing status, dependents, and extra withholding requests do not change it. This calculator models the percentage method because it is what most employers use for standalone bonus payments.
The alternative is the aggregate method: the employer adds the bonus to your regular wages for that pay period, calculates withholding on the combined amount using the normal wage tables, then subtracts what was already withheld from your regular pay. If your bonus arrives inside a normal paycheck and the withholding looks startlingly high, the aggregate method is usually why. Either way, remember that both methods only set the prepayment — your bonus is taxed at your real marginal rate when you file, and the difference settles up then.
One simplification to know about this calculator: it applies the full 7.65 percent FICA rate to the entire bonus. If your year-to-date wages have already passed the Social Security wage base ($184,500 for 2026), only the 1.45 percent Medicare share actually applies to your bonus, so your real take-home will be slightly higher than the estimate shown.
Example Calculation
Alex receives a $10,000 year-end bonus. Federal withholding at the flat 22% supplemental rate takes $2,200. FICA takes 7.65% — $765 — assuming Alex is under the Social Security wage base. Alex lives in a state with a 5% flat supplemental withholding rate, taking another $500. Total withheld: $2,200 + $765 + $500 = $3,465, leaving a net bonus of $6,535. If Alex’s actual marginal federal rate is only 12%, the true federal tax on the bonus is $1,200, meaning $1,000 of that withholding returns as part of next spring’s refund.
Frequently Asked Questions
Why is my bonus taxed higher than my paycheck?
It usually is not taxed higher — it is withheld higher. Employers must withhold a flat 22% federal tax on bonuses, while your paycheck withholding follows graduated brackets. If your real marginal rate is lower, you get the difference back at tax time.
What is the federal withholding rate on bonuses?
22% on the first $1 million of supplemental wages per year, and 37% on amounts above $1 million. Your employer may alternatively aggregate the bonus with regular wages, which can push withholding even higher.
Can I reduce tax on my bonus?
Ask your employer to defer the bonus to January if you expect a lower-income year, or increase 401(k) contributions from the bonus — 401(k) deferrals from bonus pay cut the taxable amount dollar for dollar.
Are bonuses subject to Social Security and Medicare?
Yes. Bonuses count as wages for FICA: 6.2% Social Security up to the $184,500 wage base, plus 1.45% Medicare on the full amount (and 0.9% additional Medicare over $200,000 for single filers).
Should I adjust my W-4 after a big bonus?
Only if the bonus pushed your total withholding far off target. The 22% flat withholding often over-withholds for middle earners, which just means a bigger refund — no W-4 change needed unless you consistently owe or overpay by large amounts.
Are commissions and severance taxed like bonuses?
Yes. Commissions, severance pay, back pay, and payouts of accumulated sick leave are all supplemental wages, so the same rules apply — employers generally withhold federal income tax at the flat 22 percent rate (37 percent above $1 million in a year) when the payment is made separately from regular wages, plus FICA and any state withholding.
When do I get back tax that was over-withheld from my bonus?
At tax filing time. Withholding is only a prepayment: when you file, your bonus is taxed at your actual marginal rate along with the rest of your income, and every dollar withheld is credited against what you owe. If 22 percent was withheld but your marginal rate is 12 percent, the difference comes back as a larger refund or a smaller balance due.
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Try our Paycheck Calculator and Compound Interest Calculator for more calculations.