Bonus Tax Calculator

How to use this bonus tax calculator

1. Enter the gross bonus and your regular pay before taxes, either a yearly salary or the amount of one paycheck, then choose how often you are paid.
2. Pick your filing status and, if you want an estimate of state income tax, your state.
3. Choose the withholding method. Your employer decides between the flat rate and the aggregate method, so ask payroll; the results also show both side by side.
4. Add a 401(k) percentage if you will defer part of the bonus, and open “Pay so far this year” if you earn near the Social Security wage base.
5. Compare “withheld” with “what you will really owe” to see whether part of the withholding is likely to come back.

How bonuses are taxed

The IRS calls a bonus “supplemental wages,” along with commissions, severance and similar payments that aren’t regular wages. A bonus is taxable income like the rest of your pay: it is added to your income for the year and taxed at the same income tax rates. What is special is the withholding, the amount your employer sends to the IRS on your behalf before you see the money. Publication 15 gives employers two ways to figure it when a bonus is paid separately from regular pay, and a third situation when the two are combined.

• Percentage (flat-rate) method. The employer withholds a flat 22% of the bonus. The IRS says no other percentage is allowed, and the option is available when income tax was withheld from your regular wages this year or last.
• Aggregate method. The employer adds the bonus to your regular wages for a pay period, figures the withholding on the total as if it were one regular paycheck, subtracts the tax already withheld from the regular pay, and withholds the rest from the bonus.
• Paid in the same check without being itemized. If the bonus is combined with regular pay and the amounts aren’t specified, withholding is figured on the total as a single payment, which works like the aggregate method.

Whichever method is used, the bonus is also subject to Social Security and Medicare tax. The employer’s withholding is an estimate of your tax; the real amount is settled on your Form 1040, where the tax withheld is credited against what you owe (Publication 505).

How the bonus withholding is calculated

For the flat-rate method with no amount over the Social Security wage base, the take-home amount is:

For the aggregate method, federal income tax withholding on the bonus is the extra tax the percentage method finds when the bonus is added to one paycheck:

T(x) comes from Publication 15-T. For a standard Form W-4, it subtracts a fixed amount from the annualized wages and applies the rate schedule, which works out to the standard deduction and the 2026 tax brackets. Employees who file as married filing separately use the single schedule.

Worked example

The default is a $10,000 bonus for a single employee who earns $60,000 a year and is paid every two weeks ($2,307.69 a paycheck). With the flat rate, N = $10,000 − 22% × $10,000 − 7.65% × $10,000 = $7,035.00.

With the aggregate method, a paycheck plus the bonus is $12,307.69, which annualizes to $320,000. The schedule gives T = $75,134.25 for that and $5,020.00 for the paycheck alone, so W = ($75,134.25 − $5,020.00) ÷ 26 = $2,696.70, or 27% of the bonus.

The tax the bonus really adds is different: your federal income tax for the year is $5,020 without the bonus and $6,570 with it, a difference of $1,550. Compared with the $2,200 withheld under the flat rate, that is over-withheld by $650.

How much of a bonus do you keep?

Flat-rate withholding at the example salary ($60,000, single, no state tax, nothing deferred):

The last column compares the federal income tax withheld with the extra income tax the bonus causes. A plus sign means more was withheld than the bonus adds to your tax, and that amount is likely to come back if the rest of your withholding is on target.

Flat rate vs. aggregate: how much withholding do you get?

The same $10,000 bonus at different salaries (bi-weekly pay, single):

In the last two columns, a plus sign means more was withheld than the bonus adds to your tax, and a minus sign means less. The flat rate doesn’t depend on your salary, so it over-withholds when your real bracket is below 22% and under-withholds when it is above. The aggregate method rises with your pay because it annualizes the paycheck plus the bonus. It also depends on how often you are paid, since a monthly paycheck plus a bonus is multiplied by 12 and a weekly one by 52:

Why is my bonus taxed so much?

Four things make a bonus check look small, and only the first one is a special rule:

• The withholding method. A flat 22% is above your bracket if you are in the 10% or 12% brackets. The aggregate method can be even higher because it annualizes the bonus as though you were paid that much every paycheck.
• Payroll taxes. Social Security (6.2%) and Medicare (1.45%) start with the first dollar of the bonus (Social Security stops at the wage base), with no standard deduction to absorb them.
• Your bracket. The bonus is stacked on top of your other income, so it is taxed at your top bracket or brackets. In the example the last dollar of the bonus is taxed at 22%.
• State tax. If your state taxes wages, it takes its share too.

None of that means the bonus is taxed at a higher rate than your other pay. The withholding is a prepayment, and the difference is sorted out on your tax return. To see your own bracket, use the income tax calculator or the 2026 tax brackets.

Will you get the withholding back at tax time?

There is no separate refund for a bonus. At filing, the IRS compares all the tax withheld during the year with your total tax. If the bonus was withheld at more than it really added, your refund is larger or your balance due is smaller. At the $30,000 salary above, a $10,000 bonus adds $1,200 to your tax but $2,200 is withheld under the flat rate. At $250,000 it adds $3,200, so the same flat withholding falls $1,000 short.

If you expect to owe, you can ask for extra withholding on a new Form W-4 or make an estimated payment. The IRS Tax Withholding Estimator, linked from Publication 505, checks the whole year. For how a full paycheck works, see the paycheck calculator, or the salary calculator to see what a raise is worth.

Social Security and Medicare on a bonus

For 2026, employees pay 6.2% Social Security tax on wages up to $184,500 and 1.45% Medicare tax on all wages. Employers also withhold a 0.9% Additional Medicare Tax on wages above $200,000 in the year. A $10,000 bonus costs $765 in Social Security and Medicare (7.65%) when you are under the wage base.

If your wages so far this year already reached the wage base, none of the bonus is hit by Social Security. If they are close, only the part below the base is. The calculator uses the wages you enter under “Pay so far this year” to work this out. The Additional Medicare Tax you actually owe is figured on your return, so it can differ from the amount withheld. More on the wage base is on the Social Security tax page.

Bonuses over $1 million

Supplemental wages above $1,000,000 from one employer in a calendar year are withheld at 37%, the highest income tax rate, without regard to your Form W-4. Payments from businesses under common control are added together. Only the excess is affected: for a $1,500,000 bonus with no earlier supplemental pay, if the flat rate is used below that line, federal withholding is $220,000 on the first $1,000,000 and $185,000 on the remaining $500,000. Enter earlier bonuses and commissions under “Pay so far this year” to apply the rule to your own numbers.

Putting part of a bonus in your 401(k)

A pre-tax 401(k) deferral comes out before income tax is withheld but not before Social Security and Medicare. Deferring 10% of the example bonus ($1,000) lowers federal withholding from $2,200 to $1,980 and lowers the bonus’s real income tax from $1,550 to $1,330, while your take-home falls by $780 and the money goes into your account. The 2026 employee limit is $24,500, or $32,500 with the catch-up for people 50 and over (more at ages 60 to 63), and deferrals from your regular pay count toward it. Plans differ on whether bonuses can be deferred and at what percentage, so check your plan. Try the 401(k) calculator and the 2026 401(k) limits.

State taxes on bonuses

States set their own rules for withholding on bonuses, and some use a flat rate of their own. California’s Employment Development Department, for example, publishes a separate flat-rate option for bonuses. This calculator doesn’t try to guess those rules. If you pick a state, it estimates the extra state income tax the bonus adds to your year from our 2026 state data, and shows it as an estimate, not as what your employer will withhold. Local income taxes and state payroll taxes such as disability or paid-leave contributions are not included. Rates by state are on the state income tax rates page.

Bonuses and the “no tax on overtime” and “no tax on tips” deductions

A bonus is not itself qualified overtime or qualified tips. The deductions created by the 2025 tax law cover only the “half” of time-and-a-half that federal law requires, up to $12,500 ($25,000 on a joint return), and qualified tips, up to $25,000, with income phase-outs. They are income tax deductions, so Social Security and Medicare still apply, and they don’t change the flat 22% withholding rate on a bonus. To see what they are worth, use the no tax on overtime calculator or the no tax on tips calculator. For employer-side costs of paying a bonus, see the payroll calculator.

What this calculator doesn’t include

• Form W-4 Steps 2 to 4: a second job, dependents, extra withholding and other adjustments.
• Pre-tax benefits and deferrals on your regular pay, itemized deductions, credits and income other than your pay.
• Deferrals you have already made this year, and 401(k) catch-up amounts: the bonus deferral is capped at the regular $24,500 limit.
• Your state’s actual bonus withholding, local income taxes and state payroll taxes.
• Your employer’s rounding or payroll software. Results are estimates for planning, not tax advice.