Bonus Tax Calculator
Federal Bonus Withholding · 2026
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Enter 0 for no-tax states (TX, FL, NV, WA, WY, SD, AK, NH, TN)
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Affects SS wage base & Add'l Medicare Tax ($200K threshold)
Enter your bonus amount to see your take-home after taxes.
Bonus Take-Home
$0
flat 22% method · 2026
Flat Rate Method
Withholding BreakdownAmount
Gross Bonus$0
Federal Income Tax$0
Social Security (6.2%)$0
Medicare (1.45%)$0
Total Withheld$0
Net Bonus (Take-Home)$0
Effective Rates on Bonus
Federal Withholding Rate0%
Total Withholding Rate0%
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How Bonuses Are Taxed in 2026
Bonuses are classified as supplemental wages by the IRS. The tax withheld at payment time is not necessarily the final tax owed — it is reconciled when you file your annual return.
Flat Percentage Method
22% flat
IRS default when bonus is paid separately from regular wages. Simple and common. 37% applies if your supplemental wages exceed $1,000,000 in a calendar year.
Aggregate Method
Varies
Bonus added to regular wages and total is withheld at the combined rate. Results in higher withholding for higher earners, lower for those in the 10–12% brackets.
FICA on bonuses: Social Security (6.2%) and Medicare (1.45%) apply to bonuses the same as regular wages. SS applies up to the $184,500 wage base — if YTD wages already exceed this, no SS on the bonus.
2026 Supplemental Withholding Rates (IRS Pub. 15): Bonus under $1M total supplemental wages — 22% flat · Bonus over $1M total supplemental wages — 37% on the excess · SS wage base 2026: $184,500
Withholding is not the same as your actual tax. If your effective tax rate is lower than 22%, you may get a refund on bonus withholding when you file. If higher, you may owe additional tax.
How Bonuses Are Taxed in 2026
The IRS treats bonuses as supplemental wages, which means they are subject to federal income tax withholding at a different rate than your regular paycheck. There are two methods your employer can use, and the one they choose significantly affects how much is withheld from your bonus check.
Regardless of which method your employer uses, your bonus is added to your total income and taxed at your marginal rate when you file your annual return. If too much was withheld, you get a refund. If too little was withheld, you owe the difference. The withholding method only affects timing, not the final tax owed.
Flat Rate vs Aggregate Method Explained
Flat Rate Method (22%)
The IRS allows employers to withhold a flat 22% on supplemental wages up to $1,000,000. This is the most common method. On a $10,000 bonus: $2,200 withheld for federal taxes, plus Social Security (6.2%) and Medicare (1.45%). Simple, predictable, often under-withholds for high earners in the 32-37% brackets.
Aggregate Method
Your employer adds the bonus to your most recent regular paycheck, calculates withholding on the combined amount, then subtracts what was already withheld from the regular check. Result is typically more accurate but varies based on your regular pay and W-4 allowances. Often withholds more than the flat rate method for mid-range earners.
37% Rate for Large Bonuses
If your total supplemental wages from one employer exceed $1,000,000 in a calendar year, the IRS requires the flat rate to jump to 37%. This applies to the full amount once the threshold is crossed, not just the excess. Professional athletes, executives, and commission-heavy roles can hit this threshold.
State Tax on Bonuses
Most states also withhold state income tax on bonuses. Some use a flat supplemental rate (California: 10.23%, New York: 11.7%). Others use your regular state rate. Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
How to Reduce Tax on Your Bonus
You cannot avoid paying income tax on a bonus, but you can reduce the amount withheld and potentially lower your overall tax liability. The most effective strategy is to maximize pre-tax retirement contributions. If your employer offers a 401(k), you can direct some or all of your bonus into it before taxes are applied, reducing your taxable income for the year.
Another option is to ask your employer to pay the bonus in a different tax year if you expect lower income next year. Some employers will accommodate this for year-end bonuses. Additionally, increasing your W-4 allowances temporarily can reduce withholding, though this may result in a tax bill at filing time.
2026 Federal Bonus Tax Rates at a Glance
| Withholding Method | Rate | When Used |
|---|---|---|
| Flat Rate | 22% | Supplemental wages under $1M |
| Flat Rate (high earner) | 37% | Supplemental wages over $1M |
| Aggregate | Varies | Based on regular paycheck + bonus |
| Social Security | 6.2% | Up to $184,500 wages in 2026 |
| Medicare | 1.45% | All wages, no cap |
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TurboTax 2026 — Bonuses & Supplemental Income Done Right
Get your maximum refund if your bonus was over-withheld at 22%.
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Bonus Tax Questions
Why is my bonus taxed at 22% in 2026?+
The IRS classifies bonuses as supplemental wages. When paid separately from your regular paycheck, employers must withhold at a flat 22% rate for supplemental wages under $1 million per year. This is an IRS requirement, not your actual tax rate. If your effective tax rate is lower than 22%, you will receive the difference back as a refund when you file your return.
What happens to bonus taxes when I file my return?+
Bonuses are taxed as ordinary income, not at a special bonus rate. The 22% withheld is a prepayment of your income tax. When you file, your bonus is added to your other income and taxed at your actual effective rate. If 22% is more than your effective rate, you get a refund. If you are in the 32%, 35%, or 37% bracket, you may owe additional tax on the bonus beyond what was withheld.
What is the difference between flat rate and aggregate method?+
The flat rate method withholds 22% from the bonus directly. Simple and consistent. The aggregate method combines your bonus with a regular paycheck, calculates withholding on the combined total using the wage bracket tables, then subtracts regular paycheck withholding. For earners in the 10–12% bracket, the aggregate method results in lower withholding than flat 22%. For high earners (32%+), aggregate often withholds more. Your employer chooses the method.
Is Social Security tax taken from my bonus in 2026?+
Yes. Social Security (6.2%) and Medicare (1.45%) apply to bonuses the same as regular wages. The 2026 SS wage base is $184,500. If your year-to-date wages plus the bonus exceed $184,500, SS tax stops once the limit is hit. If your YTD wages already exceed $184,500 before the bonus, no SS is withheld from the bonus at all. Medicare has no cap and always applies.
What if my bonus pushes me over $1 million in supplemental wages?+
The IRS requires employers to withhold at 37% (the top rate) on supplemental wages that exceed $1,000,000 in a calendar year. The first $1M is still withheld at 22%; only the excess above $1M is withheld at 37%. This is a withholding rule only — your actual tax rate depends on your total income and filing status.
Can I reduce the tax withheld on my bonus?+
You have limited control over withholding method — your employer chooses. However, you can contribute to a 401(k) or HSA to reduce taxable income overall. Bonus amounts can often be deferred to a 401(k) up to the $24,500 limit (2026), reducing both the bonus tax and income tax. Some employers allow employees to request additional withholding adjustments via their W-4.
Are signing bonuses taxed differently than performance bonuses?+
No. Signing bonuses, performance bonuses, referral bonuses, and other lump-sum payments are all treated as supplemental wages and taxed the same way — 22% flat withholding if paid separately from regular wages. They are all reported on your W-2 and included in ordinary income on your tax return.
Does the No Tax on Overtime rule apply to bonuses in 2026?+
No. The OBBBA No Tax on Overtime deduction applies specifically to overtime pay for nonexempt employees (premium pay for hours above 40 per week), not to bonuses, commissions, or other supplemental wages. Overtime is also subject to payroll withholding at time of payment — the deduction is claimed on your tax return, not at payroll. Bonuses remain fully taxable as supplemental wages.
What state taxes apply to my bonus?+
State bonus withholding rules vary. Most states tax bonuses as ordinary income at your regular rate. Some states have their own supplemental flat rate. Nine states have no income tax at all (TX, FL, NV, WA, WY, SD, AK, NH, TN). Enter your state rate in the field above to include state tax in the calculation. The state withholding shown is an estimate — your state may have different supplemental rules.
How is a stock bonus or RSU vesting taxed?+
Restricted Stock Units (RSUs) are taxed as ordinary income at vesting, not when granted. The fair market value of shares on the vesting date is treated as supplemental wages and generally withheld at the 22% supplemental rate (or 37% above $1M). Additional capital gains tax may apply when you later sell the shares. This calculator covers cash bonuses; RSU taxation involves additional complexity.