Bonus Tax Calculator
Estimate what will be withheld from a bonus and what lands in your account. The important word is withheld: this is what your employer sends the IRS now, not what the bonus finally costs you.
On this page
Withholding is not tax
The complaint that a bonus is "taxed at 40%" is almost always about withholding. A bonus is ordinary income taxed at your ordinary rates, exactly like salary. What differs is how much your employer sends the IRS at the moment it is paid.
If too much is withheld, the excess comes back as a larger refund or a smaller balance due when you file. Nothing is lost — it is simply held by the government until then. That is worth knowing before a bonus arrives, and it is the reason this page reports an estimated net bonus rather than an estimated tax.
The two methods, and why you do not choose
The percentage method. A flat 22% is withheld on supplemental wages, rising to a mandatory 37% on anything above $1,000,000 of supplemental wages in the calendar year. It is available only when the bonus is paid separately from regular wages, and it is simple: the same rate regardless of your salary.
The aggregate method. The bonus is added to the pay period's regular wages and withholding is computed on the combined figure as if it were a normal paycheck, then the ordinary withholding is subtracted. It tracks your actual bracket more closely, and for a high earner it usually withholds more than 22%.
Which one is used is your employer's decision, not yours. Both are permitted, and neither changes what you eventually owe.
Why 22% often feels like more
Because it is not the only thing coming out. Social Security takes 6.2% until your wages reach the annual base, Medicare takes 1.45% with no cap, and state withholding is on top of both. A 22% federal flat rate plus FICA plus a 5% state rate is close to 35% before any retirement contribution.
The calculator lists each line separately for exactly this reason. The federal figure is usually smaller than people expect and the total is usually larger.
The Social Security wage base changes the answer
Social Security stops at the annual wage base — $184,500 for 2026. If your regular wages have already passed it, none of the bonus carries the 6.2%, and the withholding rate drops noticeably. If the bonus straddles the base, only the part below it is charged.
That is why the calculator asks for your regular annual wages even when you select the percentage method. Medicare has no such cap and applies to the whole bonus.
A worked example
A $12,000 bonus for someone on $95,000, paid separately, with 10% directed into a 401(k) and a 4.25% state rate.
The retirement contribution takes $1,200 off the top and reduces the base for income tax withholding to $10,800. Federal withholding at the flat 22% is $2,376. Social Security is 6.2% of the full $12,000 — $744, since $95,000 is well under the wage base — and Medicare is 1.45%, or $174. State withholding at 4.25% is $510. Total withheld or deferred is $5,004, leaving about $6,996.
Note that the $1,200 is not withheld. It is your money, in your retirement account, and calling it a deduction from the bonus rather than a transfer of it would be misleading.
What this does not cover
- Your actual tax. That depends on your whole year. Use the federal income tax calculator once you know your total income.
- State supplemental rates. Several states set a specific rate for bonuses and some have none at all. We do not carry state figures we have not verified, so the rate here is yours to enter.
- Publication 15-T wage-bracket tables. The aggregate estimate models the shape of the method rather than reproducing the tables, so it will differ slightly from a payroll system.
- Local income tax. Not modelled.
- Equity compensation. Vesting stock is taxed as supplemental wages too, but share withholding and cost basis make it a different problem.
See our sources for the publications behind these rates.
Frequently asked questions
Are bonuses taxed at a higher rate than salary?
No. A bonus is ordinary income and is taxed at the same rates as any other wages when you file. What is different is the withholding at the moment of payment.
The flat 22% supplemental rate is a withholding convention, not a tax rate. If your marginal rate is 12%, the extra comes back as a refund.
Why was 22% withheld when my tax rate is higher?
Because the percentage method uses one flat rate regardless of income. If your marginal rate is 24% or 32%, the flat rate under-withholds and you may owe a little more at filing.
That is a reason to check your total withholding for the year, not a reason to change how the bonus was paid.
Can I ask my employer to withhold less on a bonus?
Under the percentage method the flat rate is fixed and cannot be reduced by a Form W-4. Under the aggregate method your W-4 does affect the calculation, so an adjustment there can change it.
A more direct route is to put part of the bonus into a 401(k) or HSA if your plan allows it, which reduces the income-tax base rather than deferring the question.
Does contributing my bonus to a 401(k) avoid all the withholding?
It avoids the income tax withholding on the contributed part, not the FICA. Social Security and Medicare apply to elective deferrals, so the 7.65% comes out regardless.
Check your plan first: not every plan accepts contributions from a bonus, and the annual deferral limit still applies.
What happens to a bonus over $1 million?
Supplemental wages above $1,000,000 in a calendar year must be withheld at 37%. That part is mandatory and cannot be reduced by a Form W-4.
The threshold counts all supplemental wages for the year, which is why the calculator asks what you have already received.
Should I use the percentage or aggregate method here?
Use whichever your employer uses, if you know. If you do not, run both: the percentage method is more common for a separately-paid bonus, and the gap between the two tells you the range to expect.
Neither changes your final tax, so the difference is about the size of the deposit and the size of the refund.
Related calculators
This calculator estimates WITHHOLDING on a bonus for general educational purposes. It is not tax advice and it does not calculate your tax liability. Your actual tax on a bonus is settled on your return, where over-withholding becomes a refund. State withholding uses only the rate you supply — this site does not carry state supplemental rates.