Bonus Tax Calculator
Estimate supplemental withholding on a bonus, compare the annual tax impact, and see the likely take-home amount before deciding whether to adjust your W-4.
What to compare next
This calculator is most useful when you compare the one-time bonus withholding with your broader annual tax picture and decide whether your W-4 still looks right.
How Bonuses Are Taxed in 2026
The IRS treats bonuses as “supplemental wages” and employers can withhold federal tax using one of two methods. The flat-rate method withholds 22% on bonuses up to $1 million and 37% on the portion above $1 million. The aggregate method combines the bonus with your regular paycheck for that pay period and calculates withholding on the combined total, which often looks like a higher rate.
Regardless of which withholding method your employer uses, your final tax bill is determined by your annual income and tax bracket. The withholding is just an estimate -- you may get some of it back as a refund, or owe more, when you file your return.
Withholding vs. Actual Tax Owed
A common misconception is that bonuses are “taxed at 22%.” In reality, 22% is the withholding rate, not your effective tax rate. If your marginal bracket is 12%, you are being over-withheld and will receive a refund for the difference. If your bracket is 32%, the 22% withholding is not enough and you may owe at filing time.
Social Security (6.2%) and Medicare (1.45%) also apply to bonuses, and state taxes vary. New York City workers, for example, face a combined city + state marginal rate that can add 10%+ on top of federal withholding.
Common Bonus Tax Questions
Can I reduce tax on my bonus?
You cannot change the withholding method your employer uses, but you can increase pre-tax 401(k) contributions for the pay period that includes the bonus. Some employers allow you to direct part of a bonus straight into a 401(k), reducing the taxable amount on that paycheck.
Why does my bonus check seem so small?
Supplemental withholding at 22% plus 7.65% FICA means nearly 30% is withheld federally before state taxes. A $5,000 bonus might net around $3,500 or less depending on your state. This is withholding, not the final tax -- you may recover some when you file.
Are year-end bonuses taxed differently than mid-year bonuses?
No. The IRS does not distinguish when in the year you receive a bonus. The same supplemental withholding rules apply whether it is paid in January or December. The timing only matters for which tax year the income falls in.