Bonus Tax Calculator: Withholding From a Bonus Payment
Work out the federal tax withheld from a bonus payment under the supplemental wages rule — the reason your bonus check rarely matches the gross figure your employer announced.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Federal supplemental withholding | Bonus net of federal withholding |
|---|---|---|
| 22% of $5,000 | 1,100 | 3,900 |
| 22% of $15,000 | 3,300 | 11,700 |
| 37% of $1,500,000 | 555,000 | 945,000 |
| 22% of $1,200 (small bonus) | 264 | 936 |
How This Calculator Works
Enter the gross bonus and the supplemental withholding rate (22% under US federal rules; 37% on the portion of bonuses above $1M in a year). The calculator multiplies the two to give the federal withholding and shows the net bonus before FICA payroll tax and any state withholding.
The Formula
Percentage of an Amount
Amount is the base value, Percentage is the rate applied to it
Worked Example
On a $5,000 bonus at the 22% federal supplemental rate, $1,100 is withheld for federal income tax, leaving $3,900 before FICA and state. After FICA (7.65%) and a typical 5% state withholding, the actual take-home is closer to $3,260 — about 65% of the gross.
Key Insight
Supplemental withholding at 22% is often higher than the marginal income tax rate of low- and middle-income earners — which is why many people see a 'tax refund' on bonuses at year-end. The flat-rate withholding is just a payment-time estimate; the actual tax owed depends on total income for the year and is reconciled when you file.
Why your bonus check looks tiny: the 22% flat rate trap
The IRS allows two methods for taxing supplemental wages (bonuses, commissions, severance): (1) FLAT 22% federal withholding on bonuses up to $1M, or 37% on bonus amounts above $1M, OR (2) AGGREGATE method (add bonus to regular wage and apply normal withholding tables). Most employers use the flat 22% method because it's simpler.
Concrete example: an employee earning $80k receives a $10k year-end bonus. Flat method: $10,000 × 22% federal + 7.65% FICA + (state if applicable) = roughly $3,000-3,500 withheld. Take-home: ~$6,500-7,000.
Important: the 22% is WITHHOLDING, not the actual tax owed. When you file your tax return, the bonus is added to total income and taxed at your actual marginal rate. If your marginal rate is 22%, the math works out. If higher (24%, 32%, 35%), you'll OWE more at filing. If lower (12%, 10%), you'll get a refund. The 22% is administrative — the real tax depends on total income.
Strategies to maximize bonus take-home
Strategy 1: pre-tax retirement deduction. Direct part of your bonus to 401(k), traditional IRA, or HSA pre-tax. A $10k bonus with $5k diverted to 401(k) reduces taxable bonus to $5k — saving ~$1,100-1,750 in federal tax + FICA depending on bracket. Many employers allow bonus-percentage 401(k) elections specifically.
Strategy 2: take it as deferred compensation. If your employer offers a non-qualified deferred compensation (NQDC) plan, deferring the bonus payment to a future tax year (typically retirement) can lower the tax owed. Risk: the bonus becomes an unsecured creditor claim against the company — if company goes bankrupt, you lose the bonus. Only use for low-bankruptcy-risk employers (Fortune 500, established firms).
Strategy 3: time it strategically. If you're getting a bonus AND a big tax-deductible expense (large charitable donation, home mortgage interest deduction, big medical expense), pair them in the same year to offset. The bonus drives up income, the deductions drive it down — your effective tax stays in check.
Aggregate method: when it's actually better
If your employer uses the aggregate method (less common but legal), they add the bonus to your most recent regular paycheck and withhold based on the combined amount as if it were regular pay. The withholding can be higher OR lower than the flat 22%.
Higher withholding scenario: regular biweekly paycheck $3,000 + $10,000 bonus on same check = $13,000 'paycheck'. Withheld at the rate appropriate for an annualized $338,000 income (assuming biweekly × 26). At those brackets, withholding could be ~35% — much more than the flat 22%.
Lower withholding scenario: regular paycheck $2,000 + $5,000 bonus = $7,000 paycheck. Annualized to ~$182k. Withholding still around 22-24%. About the same as flat method. So the aggregate method's impact varies hugely with the relative size of bonus to regular pay. For most workers, the flat 22% is simpler and roughly accurate.
Net bonus take-home by gross bonus and state (federal flat method 22%)
Withholding only — not necessarily final tax owed. Federal 22% + 7.65% FICA + state income tax (range shown). Subtract from gross to get take-home.
| Gross bonus | Federal 22% | FICA 7.65% | State (0-10%) | Take-home |
|---|---|---|---|---|
| $1,000 | $220 | $77 | $0-$100 | $603-$703 |
| $5,000 | $1,100 | $383 | $0-$500 | $3,017-$3,517 |
| $10,000 | $2,200 | $765 | $0-$1,000 | $6,035-$7,035 |
| $25,000 | $5,500 | $1,913 | $0-$2,500 | $15,087-$17,587 |
| $50,000 | $11,000 | $3,825 | $0-$5,000 | $30,175-$35,175 |
State withholding varies: 0% (TX, FL, WA, NV, AK, etc.), ~5-7% (most states), 9-13% (CA, NY, NJ, OR). Bonus over $1M: federal flat rate 37% on portion above $1M (the only mandatory rate — no employer choice). Always check final tax owed at filing — withholding ≠ actual tax.
Frequently Asked Questions
How is bonus tax withheld?
Most US employers use the percentage method — a flat 22% federal withholding on bonuses up to $1M a year, 37% on the portion above. Some use the aggregate method, which folds the bonus into regular pay and withholds at the implied marginal rate.
Is 22% the actual tax I owe?
No — it is the withholding rate, not the final tax. Your actual federal tax depends on total annual income. Many earners see a 'refund' at year-end if 22% overshoots their marginal rate.
Does this include FICA and state tax?
No. FICA payroll tax (7.65%) and state income tax also apply to a bonus. Add them separately for the full deduction; the calculator covers federal supplemental withholding only.
Why does my bonus feel taxed twice as much?
It is not — the supplemental rate is just higher than many people's marginal rate. The over-withholding usually comes back as a year-end refund when actual tax is calculated.
Can I avoid the supplemental rate?
Not really at withholding time. If the 22% overshoots your bracket, you receive the difference back at tax time. Some employers will use the aggregate method on request, which can lower upfront withholding for low-bracket earners.
References & Authoritative Sources
- IRS Publication 15 (Circular E) — Employer's Tax Guide — Supplemental wage withholding methods · consulted May 31, 2026 · Tax authority — official guidance on flat 22%/37% bonus withholding vs aggregate method
- IRS Notice 1036 — Withholding Tables — Annual withholding tables for supplemental wages · consulted May 31, 2026 · Annual notice — current year supplemental wage withholding rates
- Internal Revenue Code — Section 3402(p) — Statutory basis for supplemental wage withholding · consulted May 31, 2026 · Primary federal statute — employer payroll withholding obligations
Related Calculators
Data Sources & Benchmarks
This calculator draws on 1 independent, dated source.
Methodology & Review
US federal supplemental wages — including bonuses — are withheld at a flat 22% (37% over $1 million in a year) under the percentage method. State withholding and FICA payroll tax also apply but are calculated separately. The figure here is the federal supplemental withholding only.
Updated