Bonus Tax Calculator, 2026

Federal law treats a bonus as supplemental wages, a category that also covers commissions, overtime paid separately, severance, back pay and prizes. IRS Publication 15 gives employers two ways to withhold on supplemental wages paid apart from regular pay. The first is the percentage method: withhold a flat 22%, no allowances, no brackets, on the bonus itself. The second is the aggregate method: add the bonus to the employee's most recent regular paycheck, work out withholding on the combined amount under the ordinary tables as if it were one period's pay, and subtract the withholding already due on the regular pay. Whatever remains is the withholding on the bonus.

The 22% flat rate is optional and available only if income tax was withheld from the employee's regular wages in the current or previous year. Once an employee's supplemental wages for the year pass $1,000,000, 37% is mandatory on the excess, whichever method the employer otherwise uses. Social Security (6.2% up to $184,500 of wages for 2026) and Medicare (1.45%, plus 0.9% above $200,000) apply to a bonus exactly as they do to salary, under both methods.

The result is that roughly a third of a bonus never reaches the bank account, which is the number behind most of the questions about bonus tax. On a $10,000 bonus in a state with a 4.25% supplemental rate, the percentage method withholds $2,200 federal, $620 Social Security, $145 Medicare and $425 state: $3,390, leaving $6,610. That figure is a withholding, not a tax bill.

This is the point that answers most of the confusion. A bonus is ordinary income on the tax return, taxed at the same graduated rates as salary; there is no separate bonus tax rate. The 22% is only an estimate the employer is allowed to use during the year. If your actual marginal federal rate is 12%, as it is for a single filer with taxable income between $12,400 and $50,400, then 22% withholding on a bonus is about ten points too high, and the difference (roughly $1,000 on a $10,000 bonus) is returned as part of your refund when you file. If your marginal rate is 24% or 32%, the flat 22% under-withheld, and the shortfall is added to what you owe in April.

So a bonus that "got taxed at 40%" was withheld at 40%, and the true tax on it depends on your total income for the year. The state paycheck pages show your marginal federal and state rates for a given salary, which is what the bonus will finally be taxed at. The aggregate method tends to over-withhold even more than the flat rate, because one large paycheck annualised looks like a very high salary.

The employer chooses, and the pay stub tells you which they chose. If the federal line on the bonus stub is exactly 22% of the gross bonus, it was the percentage method, which is the default in most payroll systems when a bonus is paid on its own cheque or as a separate line. If the federal withholding is some other, usually larger, figure and the bonus appears on the same stub as a regular paycheck, it was the aggregate method.

The two can differ by hundreds or thousands of dollars on the same bonus. Take a $60,000 salary paid every two weeks ($2,308 a period) and a $10,000 bonus. The percentage method withholds $2,200 federal. The aggregate method adds the bonus to the period's pay, treats $12,308 as a normal fortnight's wage, annualises it to $320,000, and withholds at the rates that salary would face: about $2,697 federal on the bonus. The employee gets $497 less in hand, and gets it back at filing time. Show both in the calculator above to see the gap for your figures.

States follow one of three patterns, and the calculator applies the right one automatically. 34 states publish a flat supplemental rate an employer may use on a separately paid bonus, from North Dakota's 1.5% to New York's 11.7% and California's 10.23% for bonuses and stock options; in the flat-tax states the supplemental rate is simply the flat rate. 8 jurisdictions (Connecticut, Delaware, District of Columbia, Hawaii, New Jersey, South Carolina, West Virginia, Wisconsin) publish no separate rate: a bonus is withheld under the regular tables on the combined amount, which is the aggregate method whether or not the employer chose it for federal purposes. 9 states tax no wages at all, so only the federal lines and FICA apply.

Local income taxes also come out of a bonus where they exist: New York City's 4.25% supplemental rate, Maryland's county rates, Ohio's municipal taxes, Indiana's county taxes, Pennsylvania's local earned income tax. None is included in this estimate, and each state's bonus page says which apply. Each state page also cites the withholding guide the rate comes from.

In Texas (no state tax), the percentage method withholds $2,200 federal, $620 Social Security and $145 Medicare: $2,965, leaving $7,035. On the return, that filer's marginal federal rate is 12% until taxable income passes $50,400 and 22% above it; the $10,000 bonus straddles the two, so the tax on it is about $1,450, and about $750 of the withholding comes back.

In California, the same bonus under the percentage method also has 10.23% state withholding ($1,023) and 1.3% SDI ($130): $4,118 withheld, $5,882 in hand. California's actual marginal rate for that salary is 6% to 8%, so the state over-withheld by several hundred dollars as well. In New York the state line is 11.7% ($1,170) and, for a New York City resident, a further 4.25% ($425) that this calculator does not include.