Bonus Tax Calculator 2026
Find out exactly how much of your bonus you'll take home after federal (22%), state, Social Security, and Medicare taxes.
*Add state tax (0–13.3%) for actual take-home.
Used to determine Social Security cap and Additional Medicare surcharge
Extra withholding per your W-4 election
How Bonuses Are Taxed in 2026
Bonuses are classified as “supplemental wages” by the IRS and follow specific withholding rules — different from your regular paycheck.
Per IRS Publication 15 (Circular E), employers must withhold at the flat 22% supplemental rate on bonuses, commissions, overtime, and other supplemental wages paid separately from regular wages.
Source: IRS Publication 15 (Circular E) and SSA.gov — SS wage base for 2026.
| Gross Bonus | Federal (22%) | FICA (7.65%) | Total Tax | Take-Home* |
|---|---|---|---|---|
| $1,000 | $220 | $77 | $297 | $703 |
| $2,500 | $550 | $191 | $741 | $1,759 |
| $5,000 | $1,100 | $383 | $1,483 | $3,517 |
| $7,500 | $1,650 | $574 | $2,224 | $5,276 |
| $10,000 | $2,200 | $765 | $2,965 | $7,035 |
| $15,000 | $3,300 | $1,148 | $4,448 | $10,552 |
| $20,000 | $4,400 | $1,530 | $5,930 | $14,070 |
| $25,000 | $5,500 | $1,913 | $7,413 | $17,587 |
| $50,000 | $11,000 | $3,825 | $14,825 | $35,175 |
*Before state taxes. California adds ~10.23%, New York ~11.70% (+4.25% NYC), Texas/Florida/Washington: $0. Source: CA EDD DE 44; NY DTF NYS-50-T-NYS (1/26).
Highest State Rates
No State Income Tax (0%)
Residents of no-income-tax states keep approximately 3–10% more of their bonus compared to high-tax states like California or New Jersey.
Withholding vs. Actual Tax Owed — Key Distinction
The 22% federal withholding on bonuses is an estimate, not your actual tax rate. Your actual liability is calculated at year-end based on your total income, filing status, and deductions.
Maximize 401(k) Contributions
If your employer allows bonus contributions to your 401(k), every $1,000 contributed reduces federal withholding by $220. The 2026 limit is $24,500 ($32,500 if age 50+; $35,750 if age 60–63 under SECURE 2.0).
Contribute to an HSA
Health Savings Accounts offer a triple tax advantage: contributions reduce taxable income, grow tax-free, and withdrawals for medical expenses are tax-free. 2026 limit: $4,400 (individual), $8,750 (family) per IRS Rev. Proc. 2025-19.
Charitable Contributions
Donate to qualified charities and itemize deductions on Schedule A. A $5,000 donation in the 22% bracket saves ~$1,100 in federal tax. Consider a Donor-Advised Fund for large bonuses.
Defer to Next Year
Some employers allow you to defer your bonus to January of the following year. Useful if you expect significantly lower income next year, potentially lowering your effective rate.
| Type | Federal Withholding | FICA | State |
|---|---|---|---|
| Annual performance bonus | 22% | Yes | Varies |
| Signing / hiring bonus | 22% | Yes | Varies |
| Retention bonus | 22% | Yes | Varies |
| Commission pay | 22% | Yes | Varies |
| Overtime pay | 22%* | Yes | Varies |
| Bonus > $1 million | 37% | Yes | Varies |
*Overtime paid with regular wages uses the aggregate method. If paid separately, flat 22% applies. Source: IRS Publication 15 (Circular E).
Flat rate vs. aggregate method: the dollar difference and when each applies
Employers can use either of two IRS-approved methods to withhold federal income tax on your bonus. The method your employer chooses affects how much you take home on payday — your final annual tax bill is the same either way.
Flat Rate (Percentage) Method
- Bonus is paid on a separate check from regular wages
- Federal withholding = a flat 22% (37% above $1M)
- Simple and predictable — most common method
- Result: $20,000 bonus → $4,400 federal withheld
Aggregate Method
- Employer combines bonus with last regular paycheck, calculates total withholding using W-4 tables
- Subtracts the withholding already applied to regular wages
- Often withholds more than 22% for high earners
- Required if bonus is combined with regular wages in the same check
Side-by-side example: $20,000 bonus, $7,692 bi-weekly paycheck ($200K/yr, single, standard W-4)
| Item | Flat Rate (22%) | Aggregate Method |
|---|---|---|
| Federal income tax on bonus | $4,400 | ~$5,600–$6,300 (24–32% bracket) |
| FICA on bonus | $1,530 | $1,530 (same) |
| Total withheld from bonus | ~$5,930 | ~$7,130–$7,830 |
| Bonus take-home (before state) | ~$14,070 | ~$12,170–$12,870 |
The extra withholding from the aggregate method is not extra tax — you reconcile it when you file. Source: IRS Publication 15, Section 7 (Supplemental Wages).
The $1 million supplemental wage threshold: per employer, per year — not cumulative across jobs
The 37% withholding rate kicks in only when a single employer pays you more than $1 million in supplemental wages during a calendar year. The threshold is not tracked across multiple employers — each employer tracks only their own supplemental payments.
Two employers — both use 22%
- Company A pays you $700K in bonuses → withholds at 22% ($154K)
- Company B pays you $700K in bonuses → withholds at 22% ($154K)
- Combined $1.4M total — but neither employer triggers the 37% rate
- However, your final tax return will apply the actual 37% top bracket to the excess — you may owe more at filing
Single employer — split calculation
- Employer pays $1,500,000 in total supplemental wages
- First $1,000,000: withheld at 22% = $220,000
- Remaining $500,000: withheld at 37% = $185,000
- Total federal withholding: $405,000
Important: the threshold includes all supplemental wages from that employer
The $1M limit applies to the cumulative total of all supplemental wages from that employer in the calendar year — annual bonuses, signing bonuses, retention bonuses, commissions, overtime (paid separately), and awards. It resets to $0 on January 1. The threshold is employer-specific: if you have both W-2 employment and side-income, only W-2 supplemental wages from each employer count toward that employer's $1M threshold.
Source: IRS Publication 15 (2026), Section 7 — Supplemental Wages; IRC §3402(g).
State bonus withholding deep dive: California's two tiers, New York's new 11.70%, and flat-rate states
State withholding on bonuses varies widely. Some states have a single flat supplemental rate; others split by payment type; a few use your regular income tax brackets. Here are the most important details:
California — two-tier system
CA EDD DE 44
vacation pay, overtime
Source: CA EDD Publication DE 44 (Employer's Tax Guide).
New York — layered rates
NYS-50-T-NYS (1/26)
NYS-50-T-NYC (1/26)
NYS-50-T-Y (1/26)
NYC workers: combined 15.95% state+city supplemental rate on bonuses.
Flat-rate states
These states apply their flat income tax rate to bonuses.
Combined take-home after federal + FICA + state — $10,000 bonus
Assumes YTD wages well below SS wage base; before any 401(k) or other pre-tax deductions
| State | State Rate | State Tax | Take-Home |
|---|---|---|---|
| Texas / Florida / Washington | 0% | $0 | $7,035 |
| Pennsylvania | 3.07% | $307 | $6,728 |
| Colorado | 4.40% | $440 | $6,595 |
| Massachusetts | 5.00% | $500 | $6,535 |
| New York (state only) | 11.70% | $1,170 | $5,865 |
| New York City resident | 15.95% | $1,595 | $5,440 |
| California (bonus rate) | 10.23% | $1,023 | $6,012 |
| New Jersey | 10.75% | $1,075 | $5,960 |
Federal (22%) + FICA (7.65%) already deducted in all rows. Sources: CA EDD DE 44; NY DTF NYS-50-T-NYS & NYS-50-T-NYC (1/26); IRS Publication 15 (2026).
The take-home bonus above comes from the bonus amount, year-to-date earnings, and state you enter—not a third-party feed. We apply the IRS flat-rate supplemental withholding method (22% federal), FICA taxes with the Social Security wage base and Additional Medicare threshold, and your state's supplemental withholding rate when selected. Below are the formulas, the order we follow, and worked examples you can check by hand.
Formulas
| Line | Formula |
|---|---|
| Federal supplemental withholding | Bonus × 22% when bonus is $1,000,000 or less |
| Federal withholding over $1M | ($1,000,000 × 22%) + ((bonus − $1,000,000) × 37%) |
| Social Security | Lesser of (bonus, remaining wage base) × 6.2% |
| Remaining Social Security wage base | Max(0, wage base − year-to-date earnings before bonus) |
| Medicare | Bonus × 1.45% |
| Additional Medicare | Wages over $200,000 × 0.9% (applied to the portion of the bonus above the threshold) |
| State supplemental withholding | Bonus × state supplemental rate (0% in no-income-tax states) |
| Additional withholding | Flat dollar amount you enter (per W-4 extra withholding election) |
| Total withholding | Federal + Social Security + Medicare + Additional Medicare + state + extra withholding |
| Net bonus (take-home) | Gross bonus − total withholding |
| Effective withholding rate | Total withholding ÷ gross bonus |
Order of operations
Apply federal supplemental withholding
22% flat rate on the full bonus (or split 22% / 37% above $1M)
This is withholding on your paycheck—not your final tax bill. The IRS allows employers to withhold supplemental wages at a flat 22% when paid separately from regular wages. Bonuses over $1 million in a calendar year from one employer use 37% on the excess.
Calculate Social Security tax
6.2% on bonus wages up to the annual wage base
Social Security applies only to wages not yet subject to the cap. If your year-to-date earnings already reached the wage base ($184,500 in 2026), no Social Security is withheld on this bonus.
Calculate Medicare tax
1.45% on the full bonus amount
Unlike Social Security, Medicare has no wage cap. Every dollar of the bonus pays the 1.45% employee Medicare tax.
Add Additional Medicare if over $200,000 YTD
0.9% on the portion of the bonus that pushes total wages over $200,000
If year-to-date earnings plus the bonus exceed $200,000, the wages above that threshold pay an extra 0.9% Medicare surtax on the employee side only.
Apply state supplemental withholding
Bonus × state supplemental rate
Each state sets its own supplemental withholding rate. We use published flat supplemental rates—not your actual state income tax bracket. Local taxes (e.g. NYC) are not included unless noted on the page.
Add any extra withholding
Flat dollar amount from your W-4 election
If you elected additional federal withholding on Form W-4, enter that amount to see it deducted from your take-home.
Calculate net bonus
Gross bonus − all withholding
Your actual tax when you file may differ. You might receive a refund or owe more depending on your total income, deductions, and credits for the year.
Worked example
$10,000 bonus, $50,000 year-to-date earnings, no state selected, 2026
$10,000 × 22% = $2,200 federal withholding
$620 Social Security (6.2%) + $145 Medicare (1.45%) = $765 FICA
$10,000 − $2,965 total withholding = $7,035 take-home (29.65% effective rate)
| Line item | Amount |
|---|---|
| Gross bonus | $10,000 |
| Year-to-date earnings (before bonus) | $50,000 |
| Federal supplemental withholding (22%) | $2,200 |
| Social Security (6.2%) | $620 |
| Medicare (1.45%) | $145 |
| Additional Medicare (0.9%) | $0 |
| State withholding | $0 |
| Total withholding | $2,965 |
| Net bonus (take-home) | $7,035 |
| Effective withholding rate | 29.65% |
$10,000 × 10.23% = $1,023 California withholding. Total withholding $3,988 → take-home $6,012.
With $178,400 YTD earnings, only $6,100 of headroom remains under the $184,500 wage base. Social Security on a $10,000 bonus = $6,100 × 6.2% = $378.20 (not the full $620).
A $1,500,000 bonus from one employer: 22% on the first $1M ($220,000) + 37% on the remaining $500,000 ($185,000) = $405,000 federal withholding before FICA and state.
2026 rates and limits we use
| Parameter | What we use |
|---|---|
| Federal supplemental rate (under $1M) | 22.0% |
| Federal supplemental rate (over $1M) | 37.0% |
| Social Security wage base (2026) | $184,500 |
| Social Security rate | 6.20% |
| Medicare rate | 1.45% |
| Additional Medicare rate | 0.90% |
| Additional Medicare threshold | $200,000 |
| California supplemental rate (example) | 10.23% |
| Texas supplemental rate | 0% (no state income tax) |
What we do not model on this page
We use the flat-rate supplemental withholding method only—not the aggregate method (combining bonus with regular wages on one check). We do not model local city taxes, state disability insurance, or employer-specific withholding choices. State rates are supplemental withholding estimates, not your final state tax liability. Filing status does not change federal supplemental withholding on this page. Your actual tax is reconciled when you file Form 1040.
Frequently Asked Questions
Answers based on IRS Publication 15 and current tax law
Official Sources & References
- • IRS Publication 15 (Circular E), Employer's Tax Guide — Supplemental Wages
- • IRS Publication 15-T, Federal Income Tax Withholding Methods
- • IRS Topic 751 — Social Security and Medicare Withholding Rates
- • Social Security Administration — Contribution and Benefit Base (Wage Base) 2026
- • Tax Foundation — State Individual Income Tax Rates and Brackets 2026
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Last updated: 2026-01-25 • Tax rates verified per IRS Publication 15-T • Used by 75,000+ professionals monthly