Bonus tax calculator

Bonuses are usually taxed with a flat 22% federal withholding rate. Enter your bonus and salary to see what lands in your account, and whether the withholding is more or less than you really owe.

How bonuses are taxed

The IRS treats a bonus as supplemental wages. When it is paid separately from your regular pay, most employers withhold federal income tax at a flat 22%. Any supplemental wages over $1 million in a year are withheld at 37%.

Social Security (6.2%, until your wages for the year reach $184,500) and Medicare (1.45%, plus 0.9% on wages over $200,000) also come out, along with state income tax where your state has one.

Withholding is not your final tax

A bonus is taxed at the same rates as the rest of your pay. The 22% is only a withholding rate. When you file your return, your bonus is added to your other income and taxed at your normal brackets, and any difference comes back as a refund or is added to what you owe.

Examples

A $10,000 bonus on a $75,000 salary in Texas: $2,200 federal withholding, $620 Social Security and $145 Medicare, leaving $7,035. In California, state tax takes about $888 more.
A $5,000 bonus on a $50,000 salary: $1,100 is withheld, but the bonus only adds $600 to the year's federal tax, so about $500 should come back in your refund.

Frequently asked questions

Why is so much taken out of my bonus?

Your bonus adds federal withholding, Social Security, Medicare and often state tax in one go. If your employer adds the bonus to a regular paycheck instead of using the flat rate, withholding can look even higher for that one check, but it evens out when you file.

Can I lower the tax on my bonus?

Putting part of it into a traditional 401(k), if your plan allows bonus deferrals, lowers your taxable income. You cannot avoid the tax by asking for the bonus as a gift card or other perk, because those are taxable too.

Estimate only. Your employer may use a different withholding method. Sources: IRS Publication 15 (supplemental wages), SSA contribution and benefit base.