Bonus tax calculator: why is my bonus taxed so high?
Short answer: it isn't. A bonus is not taxed at a higher rate — when it's paid separately, your employer withholds a flat 22% for federal income tax, plus Social Security and Medicare. That's withholding, not your final tax. Enter your bonus and see what's taken out, your take-home, and whether you're likely to get some back.
Your bonus
What comes out
Worked examples
Chicago analyst, $6,800 year-end bonus
Your take-home from the bonus: $4,447
Out of a $6,800 bonus, about $2,353 is withheld (34.6%), leaving $4,447 in your pocket now.
✓ Your bonus is NOT taxed at a higher rate — the 22% is flat withholding, not your final tax. Your real tax depends on your bracket, and if it's under 22% you'll get some back at filing.
What comes out
- Bonus: $6,800
- Federal supplemental withholding (22%): −$1,496
- Social Security (6.2%): −$422
- Medicare (1.45%): −$99
- State supplemental (4.95%): −$337
- Total withheld: −$2,353 (34.6%)
- Take-home now: $4,447
Bay Area director, bonus crosses the Social Security cap
Your take-home from the bonus: $24,473
Out of a $38,500 bonus, about $14,027 is withheld (36.4%), leaving $24,473 in your pocket now.
✓ Your bonus is NOT taxed at a higher rate — the 22% is flat withholding, not your final tax. Your real tax depends on your bracket, and if it's under 22% you'll get some back at filing.
What comes out
- Bonus: $38,500
- Federal supplemental withholding (22%): −$8,470
- Social Security (6.2%, partial — near/over the $184,500 cap): −$998
- Medicare (1.45%): −$558
- Additional Medicare (0.9% over $200k): −$62
- State supplemental (10.23%): −$3,939
- Total withheld: −$14,027 (36.4%)
- Take-home now: $24,473
Texas executive, $1.25M bonus hits the 37% tier
Your take-home from the bonus: $908,125
Out of a $1,250,000 bonus, about $341,875 is withheld (27.4%), leaving $908,125 in your pocket now.
✓ Your bonus is NOT taxed at a higher rate — the 22% is flat withholding, not your final tax. Your real tax depends on your bracket, and if it's under 22% you'll get some back at filing.
What comes out
- Bonus: $1,250,000
- Federal supplemental withholding (22% / 37% over $1M): −$312,500
- Social Security (6.2%, partial — near/over the $184,500 cap): −$0
- Medicare (1.45%): −$18,125
- Additional Medicare (0.9% over $200k): −$11,250
- Total withheld: −$341,875 (27.4%)
- Take-home now: $908,125
Examples are recomputed whenever the underlying rates or data change; the date above is the last recompute.
How bonus withholding works & data sources
When a bonus is paid separately or separately identified, employers use the IRS percentage method: a flat 22% federal income-tax withholding on supplemental wages up to $1,000,000 per year, and a mandatory 37% on any amount above $1M. The 22% is unchanged for 2026 (the 2025 law made the underlying tax brackets permanent). A bonus is also subject to FICA: Social Security 6.2% up to the 2026 wage base of $184,500 (once your year-to-date pay passes that, Social Security stops), Medicare 1.45% with no cap, and an Additional Medicare 0.9% on wages above $200,000 for the year. States may add their own supplemental withholding, which varies. Crucially, all of this is withholding, not your final tax — your real liability depends on your total annual income and is settled when you file. If your marginal rate is under 22%, some comes back as a refund.
Sources: IRS — Publication 15 (supplemental wages, 22%/37%) · SSA — 2026 wage base ($184,500) · IRS — Additional Medicare Tax (0.9%)
Frequently asked questions
Is my bonus taxed at a higher rate?
No. It's withheld at a flat 22% (federal) when paid separately — that's not a higher tax, just a fixed withholding rate. Your actual tax is based on your total income and settled at filing.
Why did so much come out of my bonus?
22% federal plus Social Security (6.2%), Medicare (1.45%) and any state rate adds up to roughly 30–40% withheld — even though your final tax on it may be less. The gap comes back as a refund if your bracket is lower.
What if my employer lumps the bonus into my paycheck?
Then they may use the "aggregate method" — withholding based on your W-4 as if the combined amount were your normal pay, which can withhold more or less than the flat 22%. This tool estimates the flat-rate (separately-paid) method.
Will I get money back?
If your marginal rate is below 22%, the flat withholding took more than your real tax on the bonus, so you'd get the difference back. If it's above 22%, you may owe a bit more at filing.