Bonus Pay Calculator
Bonuses are taxed differently than your regular paycheck — the IRS classifies them as supplemental wages, which means a flat 22% federal withholding rate applies in most cases. Use this bonus tax calculator to see exactly how much of your bonus you'll take home after federal tax, state income tax, Social Security, and Medicare. Select your state and filing status for an accurate, personalised estimate.
Bonus Details
Enter your salary and bonus information
This calculator provides estimates for informational purposes only. Actual withholding depends on your employer's payroll system and elections. Your final tax liability is determined when you file your return.
Your estimate will appear here
Enter your salary and bonus details, then click Calculate.
How Bonuses Are Taxed
The IRS classifies bonuses as supplemental wages — separate from your regular salary — which triggers different federal withholding rules. Most employers use one of two methods:
Percentage method (most common): A flat 22% federal tax is withheld on bonuses up to $1 million. Any amount above $1 million is withheld at 37%.
Aggregate method: Your bonus is added to your most recent regular paycheck and total tax is calculated on the combined amount. The tax already withheld on your regular pay is subtracted. This can result in higher withholding — especially for lower earners — but doesn't change your actual annual tax bill.
On top of federal tax, your bonus is also subject to state income tax (rates vary widely — California withholds 10.23% on supplemental wages; Texas and Florida have no state income tax), plus Social Security (6.2%) and Medicare (1.45%).
Note: withholding is not your final tax liability. If too much is withheld, you'll receive the difference back as a tax refund when you file.
Quick Answer
By default, the IRS percentage method withholds a flat 22% federal tax on bonuses up to $1 million (37% on any amount above $1 million), separate from your regular paycheck withholding. After federal tax, state tax, Social Security (6.2%), and Medicare (1.45%) are subtracted, the remainder is your net bonus.
How It Works: Formula & Variables
Net Bonus = Gross Bonus − Federal Tax − State Tax − Social Security − Medicare
- Percentage Method
- Federal Tax = Bonus × 22% (up to $1M), then 37% on any amount over $1M. Example: a $5,000 bonus has $1,100 withheld federally (5,000 × 22%).
- Aggregate Method
- Federal tax on (salary + bonus) minus federal tax on salary alone. Example: $60,000 salary + $5,000 bonus = $65,000 combined; the marginal federal tax on that extra $5,000 is withheld from the bonus.
- Social Security
- 6.2% of the bonus, up to the annual Social Security wage base of $168,600.
- Medicare
- 1.45% of the bonus, with no wage limit. An additional 0.9% applies on combined wages above $200,000 (single) or $250,000 (married jointly).
Worked Examples
Example 1: Percentage method
Jordan earns $60,000 annually and receives a $5,000 year-end bonus in California (Single filer). Using the percentage method, $1,100 (22%) is withheld for federal tax, plus California state tax at 10.23% ($511.50), Social Security ($310), and Medicare ($72.50). Total withholding is $1,994, leaving a net bonus of approximately $3,006.
Example 2: Aggregate method
Priya earns $60,000 annually and receives a $5,000 bonus (Single filer, Texas — no state income tax). Using the aggregate method, federal tax on $65,000 minus federal tax on $60,000 gives roughly $1,100 withheld federally. Combined with Social Security and Medicare, her net bonus comes out to approximately $3,518.
Key Concepts
Supplemental wages: Bonuses, commissions, and other irregular payments are classified by the IRS as "supplemental wages," which have their own federal withholding rules separate from regular pay.
Withholding vs. tax liability: The amount withheld from your bonus is not your final tax bill — it's a prepayment. Your actual tax owed on the bonus depends on your total annual income and tax bracket, settled when you file your return.
FICA on bonuses: Social Security and Medicare (together, FICA) apply to bonuses just like regular wages — there's no special exemption for supplemental pay.
Employer discretion: Employers can choose either the percentage or aggregate method when bonuses are paid separately from regular wages — the method used can meaningfully change how much is withheld upfront.
Common Mistakes
Thinking 22% is your tax rate on the bonus: The 22% flat withholding is just a prepayment estimate — your actual tax rate on the bonus depends on your total income for the year and could be higher or lower.
Forgetting the $1 million threshold: If your bonus (combined with other supplemental wages in the year) exceeds $1 million, the excess is withheld at 37%, not 22%.
Ignoring state and local taxes: Many states tax bonuses too, sometimes at a different rate than regular wages — leaving this out can make your net bonus estimate too high.
Overlooking the Social Security wage base: If your year-to-date wages are already at or above $168,600, little or none of your bonus will have Social Security tax withheld — the calculator accounts for this automatically.
Frequently Asked Questions
The percentage method applies a flat 22% federal withholding rate to your bonus (37% on amounts over $1 million), regardless of your regular income. The aggregate method combines your bonus with your most recent regular paycheck, calculates federal tax on the combined amount using standard payroll tables, then subtracts the tax already withheld from your regular pay. The aggregate method can result in higher upfront withholding for lower earners but doesn't change your final tax liability.
It often feels that way because employers withhold a flat 22% federally on bonuses — which may be higher than your effective withholding rate on regular pay. But your actual tax rate on the bonus is based on your total annual income and tax bracket, settled when you file your return. If too much was withheld, you get the difference back as a refund.
The federal flat withholding rate on most bonuses is 22% (37% on amounts over $1 million), plus state income tax where applicable, Social Security (6.2%), and Medicare (1.45%). Total withholding typically lands between 28–42% depending on your state and income level. This is withholding upfront — not your final tax rate.
Under the percentage method, the first $1 million of supplemental wages in a calendar year is withheld at 22% federally. Any amount above $1 million is withheld at 37% — the top federal income tax rate — regardless of your filing status.
Multiply your gross bonus by 0.22 for federal withholding, add your state's supplemental rate, then add 0.062 for Social Security and 0.0145 for Medicare. Subtract the total from your gross bonus. The calculator above handles this automatically — enter your state and bonus amount to see your net figure instantly.
Yes — select your state from the dropdown and the calculator applies the correct supplemental wage rate automatically. Rates vary widely: California withholds 10.23%, Pennsylvania 3.07%, and states like Texas, Florida, and Washington take 0%.
Yes, bonuses are subject to Social Security tax (6.2%) just like regular wages, up to the annual Social Security wage base ($168,600 for 2024). If your year-to-date earnings plus your bonus exceed this limit, only the portion up to the limit is taxed. Medicare (1.45%) applies to all bonus income with no cap.
Yes — signing bonuses are supplemental wages and subject to the same 22% flat federal withholding, plus state tax, Social Security, and Medicare. Some signing bonuses include repayment clauses if you leave within a set period, but the tax treatment at the time of payment is identical to a performance bonus.
Yes. Commissions paid separately from your regular paycheck are also classified as supplemental wages by the IRS, subject to the same 22% flat federal withholding rate, plus state tax, Social Security, and Medicare.
You cannot change the supplemental withholding rate itself, but you can adjust your W-4 to reduce withholding on your regular paychecks to compensate. Some employers allow you to choose the aggregate method, which may result in less withholding if your regular income is low. Any excess withholding is refunded when you file your return.
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