🎁 Bonus Tax Calculator
That $10,000 bonus is not $10,000. See exactly what federal, FICA, and state take — and what lands in your account.
How Bonuses Are Taxed
The IRS classifies bonuses as supplemental wages — taxed at the same rates as salary, but withheld differently. Employers usually apply the flat 22% federal supplemental rate (37% on amounts over $1 million in a year) instead of your W-4 bracket rate.
The Withholding Formula
Important: 22% is just withholding, not your final tax. The bonus still joins your total income on your return — if your marginal rate is 24%, you will owe the extra 2% at filing; if it is 12%, you get the difference back as a refund.
Worked Example
$10,000 bonus, 5% state tax: federal = $2,200, Social Security = $620, Medicare = $145, state = $500. Total withheld = $3,465 → net bonus $6,535 (you keep 65.35%). High earners past the $176,100 Social Security wage base keep the 6.2% too.
Official reference: IRS.gov. This is an estimate for planning only — not tax advice. Verify with a CPA or tax professional before filing.
Why Bonuses Feel Over-Taxed
Employers withhold on bonuses two ways: the 22% flat method (used for bonuses up to $1M; 37% above) or the aggregate method (bonus folded into regular pay, withheld at your marginal rate). The flat 22% is just withholding, not your actual tax — at filing, the bonus is taxed as ordinary income at your real marginal rate, which is why high earners often owe more on bonuses and moderate earners get a refund. States add their own supplemental rates (e.g., California ~10.23%). Smart moves: bump your 401(k) contribution rate before a known bonus to shelter it, or time deductions; and if bonuses are large and regular, adjust your W-4 Step 4(a) rather than oscillating between big refunds and surprise balances due each April.
Frequently Asked Questions (FAQs)
Why is my bonus taxed at 22%?
The IRS lets employers withhold a flat 22% on supplemental wages up to $1 million instead of using your W-4 tables. It is simpler for payroll — but it is withholding, not your final tax rate.
Are bonuses taxed higher than salary?
No. Bonus income is ordinary income taxed at your normal marginal bracket. The 22% flat withholding only determines what is taken upfront; your return reconciles the difference.
How can I reduce tax on a bonus?
Time it into a 401(k) contribution (if your plan allows bonus deferrals), increase HSA contributions, or bunch deductions. You cannot change the withholding rate your employer uses.
What about bonuses over $1 million?
Supplemental wages above $1 million in a calendar year must be withheld at 37% (the top bracket) — mandatory, no exceptions.
Do bonuses count toward Social Security?
Yes, up to the annual wage base ($176,100). Bonuses paid after you have passed the cap are exempt from the 6.2% Social Security portion.
Last updated: September 2026
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Last updated: September 2026