Bonus Tax Calculator (2026)

Why your bonus check feels smaller than your salary

Every January and June there's a wave of "my bonus got taxed at 40 percent" posts on Reddit and Twitter. The math is real, but the framing is wrong. Bonuses aren't taxed at a higher rate. They're withheld at a different rate, and that difference gets reconciled when you file your tax return.

The 22% federal withholding rule

The IRS classifies bonuses, commissions, severance, retroactive pay, and a handful of other one-time payments as "supplemental wages." For supplemental wages totaling under $1 million per recipient per year, employers withhold a flat 22 percent for federal income tax. Anything above the $1M threshold is withheld at 37 percent - the top marginal rate. This rule has been in effect since the Tax Cuts and Jobs Act of 2017 and was extended for 2026.

Why 22% can be too much or too little

If your normal marginal federal rate is 12 percent (single filers earning under about $48K of taxable income), the 22 percent withholding overshoots by 10 points and you'll get that excess back at filing as part of your refund. If your marginal is 24 percent or 32 percent, the 22 percent withholding undershoots and you'll owe more. The 22 percent flat rate is a rough average that happens to land near the actual rate for filers in the 22 percent bracket - convenient for them, frustrating for everyone else.

State supplemental withholding

Most states with an income tax also have a flat supplemental withholding rate. California's 10.23 percent is among the highest. New York is 11.7 percent. Pennsylvania uses its flat 3.07 percent (Pennsylvania doesn't have a separate supplemental rate). The nine no-income-tax states withhold nothing on the state line. Like federal, the state supplemental rate is reconciled against your actual state tax liability when you file your state return.

FICA is final, not refunded

Social Security at 6.2 percent and Medicare at 1.45 percent always come out of a bonus, just like a regular paycheck. The Social Security 6.2 percent stops once your year-to-date wages reach the $184,500 cap (2026); above that, only Medicare applies. The 0.9 percent Additional Medicare Tax kicks in once year-to-date wages exceed $200,000 single or $250,000 married filing jointly. Unlike income tax withholding, FICA isn't reconciled at filing - what's withheld is what you pay.

The "aggregate method" - when employers don't use 22%

An employer can choose to use the IRS's "aggregate method" instead of the flat 22 percent rate. Under that method, the bonus is added to your most recent regular paycheck and withheld at your effective rate on the combined amount. This usually results in higher withholding for high earners and lower for low earners, because it actually approximates your marginal bracket. Most large employers stick with the flat rate because it's simpler for payroll. Ask HR which method your company uses if your bonus check looks unexpectedly different from this calculator.

What might change in the next 24 months

The 22% federal supplemental rate is tied to TCJA's 22% bracket. The One Big Beautiful Bill Act made the TCJA individual rate structure permanent in 2025, so the 22% / 37% supplemental structure no longer faces the old end-of-2025 sunset. The rate would only move if a future Congress re-cut the underlying brackets. Worth tracking if you're sizing a multi-year bonus or RSU vesting plan.

State supplemental rates change more frequently than federal rates. A handful of states (NJ, NM, MA) have adjusted their supplemental rates upward in the past three years, and California's 10.23% supplemental rate was joined by a separate 1.1% SDI tax. The Social Security wage base also climbs annually with the National Average Wage Index ($184,500 in 2026, up from $176,100 in 2025), so a bonus paid in January faces 6.2% SS where the same bonus paid in November might not, depending on year-to-date wages.