Bonus Tax Calculator 2026
Bonus take-home after 22% federal supplemental withholding (or the aggregate method), Social Security, Medicare, state and 401(k), the true tax at your bracket, over- or under-withholding, and the gross-up for a target net.
| Federal income tax withheld | — |
|---|---|
| Social Security + Medicare | — |
| State tax | — |
| 401(k) deferral | — |
| Total withheld | — |
| True federal tax on the bonus (your marginal bracket) | — |
| Over- or under-withheld | — |
| Bonus needed for a target take-home | — |
In short
Bonuses are withheld at a flat 22% federal rate (37% above $1 million) plus 6.2% Social Security, 1.45% Medicare and state tax, so 30–40% can come off the cheque — but the bonus is taxed as ordinary income at your bracket when you file, and any over-withholding returns as a refund. A $10,000 bonus with 5% state tax nets about $6,535.
Who this is for: US employees expecting a bonus or commission and HR teams explaining the withholding.
How bonuses are withheld — and actually taxed
- Percentage (flat) method: 22% federal withholding on supplemental wages up to $1 million in the year, 37% above — used when the bonus is paid separately or identified separately.
- Aggregate method: the bonus is added to a regular paycheck and withheld as if you earned that every period — often pushes the paycheck into a higher bracket and over-withholds.
- FICA still applies: 6.2% Social Security (until the $184,500 wage base) and 1.45% Medicare.
- True tax: at filing the bonus is just income; if your marginal rate is 12% or 24% the 22% withholding was too much or too little, and the refund or balance due adjusts.
- Gross-up: employers who promise a "net" bonus divide by (1 − total withholding rate).
Assumptions
- Flat method: 22% on the taxable bonus up to $1 million, 37% above; aggregate: tax on (regular pay + bonus) annualised minus tax on regular pay, for one period.
- FICA: 6.2% on the bonus within the remaining wage base, 1.45% + 0.9% above $200,000 of year-to-date wages.
- True tax = ordinary tax with and without the bonus at the 2026 brackets; gross-up = net ÷ (1 − combined withholding rate).
Worked example
Withheld: federal $2,200 (22%) + Social Security $620 + Medicare $145 + state $500 = $3,465 → take-home $6,535. The true federal tax on the bonus is $2,200 — it falls entirely in the 22% bracket — so withholding matches. To net $10,000 the employer would need to pay about $15,300 (grossed up for 22% + 7.65% + 5%).
Frequently asked questions
Are bonuses taxed at 40%?
No — federal withholding is 22% plus 7.65% FICA plus state, so 30–40% can come off the cheque, but the bonus is taxed at your ordinary bracket when you file; any excess withholding comes back.
What is the bonus tax rate for 2026?
There is no special rate; the supplemental withholding rate is 22% (37% on amounts over $1 million), and the income is taxed at 10–37% like salary.
Can I avoid tax on a bonus?
Only by deferring it into a 401(k), HSA or deferred-compensation plan; timing it into a lower-income year helps if your employer allows.
Why was my bonus taxed more than my salary?
Most likely the aggregate method, or FICA and state on top of the 22% — the overall rate on your return is unchanged.
What is the aggregate method?
The bonus is combined with a regular paycheck and withholding is computed as if that larger amount were your normal pay, then the regular withholding is subtracted.
Is a commission taxed like a bonus?
Yes — commissions, overtime, severance and stock vesting are supplemental wages with the same 22% withholding rule.
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