How Is a Bonus Taxed?
Bonuses are "supplemental wages" and taxed differently than regular pay. Most employers withhold a flat 22% for federal taxes, but the aggregate method can take more. Use our calculator to see your actual take-home.
✓ Flat 22% vs. aggregate method explained
✓ Federal + state + FICA breakdown
✓ See your actual take-home bonus
Bonus pay tax calculator · Percentage method
Gross bonus
$5,000.00
Federal withholding (22%)
−$1,100.00
State withholding (6.60%)
−$330.00
Social Security (6.2%)
−$310.00
Medicare (1.45%)
−$72.50
Total withholding
−$1,812.50
36.25% effective
Net bonus (take-home)
$3,187.50
Two Ways Bonuses Are Taxed
The IRS allows employers to choose between two withholding methods for supplemental wages:
1. Percentage Method (Flat 22%)
Your employer withholds a flat 22% for federal income tax on the bonus amount. This is separate from your regular paycheck withholding. For bonuses over $1 million, the rate jumps to 37% on the excess.
2. Aggregate Method
Your employer combines the bonus with your most recent regular paycheck and calculates withholding on the total as if it were a single payment. This often results in higher withholding because it temporarily pushes you into a higher tax bracket.
Complete Tax Breakdown on a Bonus
| Tax | Rate |
|---|---|
| Federal income tax | 22% (flat) or marginal rate |
| Social Security (OASDI) | 6.2% (up to wage base) |
| Medicare | 1.45% (+ 0.9% over $200K) |
| State income tax | Varies (0% to 13.3%) |
Withholding ≠ Final Tax
Remember: the withholding on your bonus is just an estimate. Your actual tax on the bonus is determined by your total income when you file your return. If too much was withheld, you get a refund. If too little, you owe the difference.