Bonus Tax Calculator
Updated August 2026 · Free · No sign-up
See what your bonus is actually worth after taxes. Enter your gross bonus — the calculator applies the 22% federal flat withholding, Social Security, Medicare, and your state rate to show the real take-home amount.
Quick answer: US bonuses withhold at a 22% federal flat rate (37% on amounts over $1 million) plus 7.65% FICA and state tax. A $5,000 bonus typically takes home around $3,300–3,600. The higher withholding reconciles at tax filing — bonuses are NOT taxed at a permanently higher rate.
How Bonuses Are Taxed (The Percentage Method)
The IRS treats bonuses as supplemental wages. Most employers use the percentage method: a flat 22% federal income tax withholding on bonuses up to $1 million in a year, and a mandatory 37% on any amount above $1 million. On top of that, the bonus is normal FICA wages — 6.2% Social Security (up to the annual wage base) and 1.45% Medicare — plus your state's income tax.
The critical thing to understand: withholding is not your tax. The 22% flat rate is just what's taken from the check. At filing time your bonus is ordinary income taxed at your actual bracket — if 22% over-withheld, you get the difference back as a refund; if you're in a higher bracket, you may owe more.
Bonus Take-Home Formula
Take-Home = Gross Bonus − 22% Federal − 6.2% Social Security − 1.45% Medicare − State Tax
Worked Examples
Example 1 — typical bonus. $5,000 bonus, 5% state tax, under the SS wage base:
- Federal: $5,000 × 22% = $1,100
- Social Security: $310 • Medicare: $72.50 • State: $250
- Take-home: $3,267.50 (65.4% of gross)
Example 2 — no-income-tax state. Same $5,000 in Texas: federal + FICA only = $3,517.50 take-home.
Example 3 — the aggregate method surprise. Some employers add the bonus to a regular paycheck and withhold using the normal W-4 tables (aggregate method). One combined big check can push withholding above 30% — looks brutal, but reconciles identically at filing.
Percentage vs Aggregate Method
| Percentage method | Aggregate method | |
|---|---|---|
| How it works | Flat 22% federal on the bonus alone | Bonus added to regular paycheck; W-4 tables applied to the total |
| When used | Bonus paid as a separate check (most common) | Bonus combined with regular wages |
| Typical withholding | ~30–35% all-in | Often higher — the tables treat the big check as your new normal pay |
| Your final tax | Identical — withholding differences reconcile on your return | |
Why Your Bonus Check Looks So Small (and Why It's OK)
Three things stack: the flat 22% is higher than many people's effective rate; FICA takes its 7.65% like on any wage; and some states add 5-10%. Seeing ~35% vanish feels like a penalty, but two of the three self-correct: excess federal withholding returns as a refund, and if you've crossed the Social Security wage base ($176,100-region — it moves yearly), the 6.2% shouldn't be taken at all. What never returns is FICA below the cap — that's real tax, same as on salary. See the full FICA math in the FICA payroll tax calculator.
Legitimate Ways to Keep More of a Bonus
- 401(k) deferral: many plans let you set a separate bonus deferral percentage — bonus dollars into a traditional 401(k) skip federal/state income tax now (not FICA). A 50% deferral on a $10k bonus shelters $5k.
- HSA top-up via payroll: payroll HSA contributions skip income tax and FICA — the only true FICA escape.
- Timing: a December vs January bonus lands in different tax years — relevant if next year's income will be much lower (sabbatical, job change).
- W-4 adjustment: if the 22% consistently over-withholds for you, extra allowances on regular pay balance the year — do the math or ask a tax preparer, don't guess.
Bonus Tax Myths, Corrected
- "Bonuses are taxed at 40%." No — withheld around 30-35% all-in, taxed at your ordinary bracket at filing.
- "A bonus can push all my salary into a higher bracket." No — brackets are marginal; only dollars above each threshold pay the higher rate.
- "Declining a bonus saves tax." Never — you always keep more by taking more gross income.
- "Employers choose 22% to be mean." IRS rules set the flat rate; employers don't control it (above $1M the 37% is mandatory).
Bonuses vs Other Lump Sums
The same supplemental-wage withholding hits severance, PTO payouts, commissions, and retention bonuses. One nuance for signing/retention bonuses with clawbacks: if you repay a bonus in a later tax year, recovering the tax you paid is genuinely messy (Section 1341 claim-of-right) — negotiate clawbacks pro-rated or waived before signing. Raises, by contrast, withhold as normal wages — compare a raise against a one-time bonus with the pay raise calculator: a $5,000 raise repeats every year; a $5,000 bonus doesn't.
Frequently Asked Questions
How much tax is taken out of a bonus?
Typically 22% federal flat withholding plus 7.65% FICA plus state income tax — around 30-35% total. Bonuses over $1 million withhold 37% federal on the excess.
Why are bonuses taxed at 22%?
The IRS sets a flat supplemental-wage withholding rate so employers can process bonuses without recomputing your W-4 math. It is withholding, not your final tax — your return settles the true amount.
Are bonuses taxed higher than salary?
No. Bonuses are ordinary income at filing time. They are often WITHHELD at a higher rate than your paycheck, which creates the illusion — the difference comes back as a refund.
What is the take-home on a $10,000 bonus?
Roughly $6,500-7,000: $2,200 federal (22%), $765 FICA, and $0-1,000 state depending on where you live. Enter your state rate above for a precise figure.
Do bonuses get Social Security and Medicare tax?
Yes — full FICA applies: 6.2% Social Security up to the annual wage base and 1.45% Medicare on everything (plus 0.9% above $200k in wages).
What is the aggregate method?
When a bonus is added to a regular paycheck and normal W-4 withholding tables apply to the combined amount. It often withholds more than the 22% flat method but reconciles identically at filing.
Can I put my whole bonus in my 401(k)?
Many plans allow a separate bonus deferral election up to plan/IRS limits. Deferred amounts skip income tax withholding now (FICA still applies). Check your plan portal before the bonus pays out.
Is the 22% rate the same in every state?
The federal 22% is national; state withholding varies from 0% (TX, FL, WA, NV, TN and others) to 10%+ (CA top rates). Some states set their own supplemental flat rates.
What happens if my bonus is over $1 million?
Federal withholding is mandatory at 37% on the amount above $1M — no employer discretion. Below $1M, the flat 22% (or aggregate method) applies.
Do I get bonus withholding back?
If the 22% flat rate exceeds your actual marginal rate, yes — as part of your tax refund after filing. If you are in the 32%+ brackets, you may owe additional tax instead.
✓ Formula verified • Last updated: August 20, 2026