Bonus Tax Calculator

Bonus tax withholding is calculated differently from regular salary withholding in the US. The IRS allows two methods: the flat rate method (simplest) and the aggregate method (more precise). Understanding which your employer uses helps you predict your take-home amount after bonus withholding.

Flat rate method formula: Federal Withholding = Bonus Amount × 22% (for bonuses up to $1 million) Federal Withholding = $220,000 + (Bonus − $1,000,000) × 37% (for bonuses over $1 million)

Aggregate method formula:

1. Add bonus to regular paycheck for the pay period
2. Calculate withholding on the combined amount using normal tax tables
3. Subtract the withholding already calculated on the regular paycheck
4. The remainder = bonus withholding

Total deductions from bonus: Net Bonus = Gross Bonus − Federal Withholding − State Withholding − Social Security − Medicare

Where:

• 22% flat rate, the supplemental wage flat rate
• Social Security = 6.2%, but only on wages up to the annual wage base, $184,500 for 2026
• Medicare = 1.45%, with an additional 0.9% once wages pass $200,000
• State withholding varies enormously (0% in Texas, Florida and Nevada, up to 13.3% in California), so the calculator takes it as an input rather than guessing

Worked example: An employee in California gets a $10,000 year-end bonus, on top of $85,000 already earned this year.

• Federal withholding, flat 22%: $10,000 × 0.22 = $2,200
• California state withholding, roughly 9.3%: $10,000 × 0.093 = $930
• Social Security, 6.2% (still well under the $184,500 wage base): $620
• Medicare, 1.45%: $145

Total withheld: $3,895 Net bonus received: $10,000 − $3,895 = $6,105

Withheld is not owed, and this is the part worth understanding. The 22% is a withholding rate, not a tax rate. It is what your employer sends to the IRS on your behalf, and it has nothing to do with your actual bracket.

If your marginal bracket is 12%, the flat 22% over-withholds and you get the difference back as a refund. If your marginal bracket is 32% or 35%, the flat 22% under-withholds and you will owe the shortfall at filing. That second case catches people out every April, because a bonus large enough to matter is often large enough to push its own top dollar into a higher bracket than the one you were sitting in.

The calculator below shows the bracket your bonus actually lands in, given your filing status and what you have already earned, so you can see which way the flat rate is wrong for you and roughly by how much.