US Bonus Tax Calculator

Not exactly, and this is the single most common bonus-tax misconception in the US. The 22% is a federal withholding rate, the flat percentage your employer is required to hold back from a bonus paycheck under the IRS "percentage method" for supplemental wages (37% instead, once your cumulative supplemental wages for the year pass $1,000,000). It is not your actual tax rate. Your real federal tax liability on the bonus is whatever your marginal income tax bracket works out to once the bonus is added to your regular income on your annual return, which can be higher or lower than 22% depending on your total income. This calculator shows both numbers side by side.

Two separate reasons stack together. First, federal withholding on a bonus uses the flat 22%/37% supplemental-wage rate instead of your regular paycheck's graduated withholding tables, so a single bonus check often has a higher withholding percentage than a same-size regular paycheck would. Second, Social Security and Medicare (FICA) still apply in full, and if the bonus pushes you over $200,000 for the year, the Additional Medicare Tax kicks in on top. None of this changes your actual annual tax bill, it's a withholding-timing effect that gets reconciled when you file.

Yes, if your true marginal federal rate on the bonus is lower than the 22% (or 37%) withheld, the difference comes back as part of your overall tax refund (or reduces a balance due) when you file your return, since withholding for the whole year is reconciled against your total actual tax liability, not tracked paycheck by paycheck. This calculator's "true federal tax on bonus" figure shows what you actually owe, versus what was withheld.

Employers can legally choose either the flat 22%/37% percentage method, or the "aggregate method" (combining the bonus with your next regular paycheck and withholding based on your W-4 as if it were one larger paycheck). Most employers use the flat percentage method because it's simpler to administer, especially for bonuses paid separately from regular payroll. Either way, your true tax liability at year-end is the same, only the withholding timing differs.

Yes. In every state that taxes wage income, a bonus is treated as ordinary income subject to that state's normal income tax rules, there is no separate state "bonus rate" the way there is federally. Select your state above to see it added: states with no income tax (Texas, Florida, Washington, and six others) add $0, flat-rate states apply their single rate, and progressive-bracket states (like California) apply their marginal rate at your combined salary-plus-bonus income level.

The most effective legal route is directing some or all of the bonus into a pre-tax retirement account, if your employer's plan allows bonus deferrals into a 401(k). Pre-tax 401(k) contributions reduce the taxable income the bonus adds, lowering both the federal and (in most states) state tax owed on it, though FICA still applies. Timing also matters at the margin: a bonus that pushes you into a higher federal bracket, or over the $200,000 Additional Medicare Tax threshold, is taxed more heavily on that marginal slice, so understanding where your total income lands (which this calculator shows) helps you plan around it.

Once your cumulative supplemental wages (bonuses, commissions, and similar payments) for the calendar year cross $1,000,000, the IRS requires mandatory 37% federal withholding on the portion above that threshold, regardless of your W-4 elections, with no employer discretion to use a lower rate on that excess. Below $1,000,000 cumulative, the standard 22% flat rate applies. This calculator assumes the bonus you enter is the year's only supplemental payment; if you've already received other bonuses or commissions this year, your actual withholding on a later bonus may cross into the 37% tier sooner than shown here.