Bonus Tax Calculator
Bonuses are taxed as supplemental wages — employers typically withhold a flat 22%, but your actual tax depends on your marginal rate. Compare withholding methods side by side to see what you'll take home.
Key Facts About Bonus Tax
- 1. Flat withholding: 22% on bonuses up to $1M, 37% above $1M
- 2. Subject to Social Security (6.2%) and Medicare (1.45%) taxes
- 3. Your actual tax depends on your marginal tax rate, not the withholding rate
- 4. Two withholding methods: flat rate vs aggregate
- 5. Withholding is an estimate — any excess is refunded when you file
| Tax Component | Flat Method (22%/37%) | Aggregate Method |
|---|---|---|
| Federal Tax | $2,200 | $2,200 |
| Social Security | $620 | $620 |
| Medicare | $145 | $145 |
| Total Tax | $2,965 | $2,965 |
| Net Bonus (Take-Home) | $7,035 | $7,035 |
Your 3.5% effective rate is below the national median of 13.2% for incomes $75k–$100k.
Based on IRS Statistics of Income data. Individual results vary.
Bonus Amount
$10,000Flat Withholding Rate
22.00%Aggregate Effective Rate
29.65%How Bonus Tax Works in the US
Supplemental Wage Classification
The IRS classifies bonuses as supplemental wages under IRS Publication 15 (Circular E). This is the same category that covers severance pay, commissions, overtime, back pay, and other non-regular compensation. Because bonuses are supplemental, your employer has two options for calculating federal income tax withholding: the flat percentage method or the aggregate method. The choice of method does not change the total tax you owe for the year — it only affects how much is withheld upfront.
Flat Rate Method
The flat rate method applies a straightforward 22% federal withholding rate on bonus amounts up to $1 million. For any portion exceeding $1 million, the withholding rate jumps to 37%. This is the most common approach because it is simple for payroll departments to administer — no additional calculations are required beyond multiplying the bonus by the flat rate. The 22% rate is set by the IRS and applies regardless of your filing status, number of allowances, or regular income level.
Aggregate Method
The aggregate method combines your bonus with your most recent regular paycheck and calculates withholding on the total as if it were a single payment for that pay period. Your employer then subtracts the tax already withheld from your regular pay to arrive at the bonus withholding amount. The difference between the two methods can be significant — the aggregate method may withhold substantially more if the combined amount pushes you into a higher bracket for that pay period, or less if your income is modest.
Why Bonuses Look Heavily Taxed
Many workers are surprised to see their bonus "taxed" at 22% or more. It is important to understand that withholding is not the same as your actual tax. The flat 22% is simply an estimate to ensure enough is collected throughout the year. When you file your annual return, the IRS calculates tax on your total income. If the withholding rate exceeded your effective rate, you receive a refund. If your marginal bracket is higher, you may owe additional tax. Either way, the bonus is taxed at your normal marginal rate — not at a special "bonus tax rate."
FICA Taxes on Bonuses
In addition to federal income tax, bonuses are subject to FICA taxes. Social Security tax applies at 6.2% on earnings up to the wage base ($176,100 in 2025). If your year-to-date earnings have already exceeded the cap, no additional Social Security tax is owed on the bonus. Medicare tax applies at 1.45% with no earnings cap. High earners face an additional 0.9% Medicare surtax on combined wages exceeding $200,000 (single) or $250,000 (married filing jointly).
2025 Federal Tax Brackets
| Rate | Single | Married Filing Jointly |
|---|---|---|
| 10% | $0 - $11,925 | $0 - $23,850 |
| 12% | $11,926 - $48,475 | $23,851 - $96,950 |
| 22% | $48,476 - $103,350 | $96,951 - $206,700 |
| 24% | $103,351 - $197,300 | $206,701 - $394,600 |
| 32% | $197,301 - $250,525 | $394,601 - $501,050 |
| 35% | $250,526 - $626,350 | $501,051 - $751,600 |
| 37% | Over $626,350 | Over $751,600 |
Worked Example: $100k Salary + $15k Bonus
Consider a single filer earning $100,000 in annual salary who receives a $15,000 bonus. Using the 2025 standard deduction of $15,750 (OBBBA):
Flat Method
Federal withholding: 22% x $15,000 = $3,300
Social Security: 6.2% x $15,000 = $930
Medicare: 1.45% x $15,000 = $217.50
Total deducted: $4,447.50 | Net bonus: $10,552.50
Aggregate Method
With $100,000 salary + $15,000 bonus = $115,000 total income. After the $15,750 standard deduction, taxable income is $99,250. The $100,000 salary alone (after deduction) yields $84,250 taxable. The bonus pushes taxable income from $84,250 to $99,250 — this entire $15,000 falls in the 22% bracket ($48,476-$103,350 for single filers). In this case, the aggregate method produces the same 22% federal withholding as the flat method.
However, if the salary were $40,000 instead, total taxable income after deduction would be $40,000. Part of the bonus would be taxed at 12% (up to $48,475) and part at 22%, resulting in lower withholding under the aggregate method. Conversely, a $200,000 salary would push the bonus into the 32% bracket, making the flat 22% method the better deal.
FICA Breakdown
Both methods deduct the same FICA taxes. On a $15,000 bonus with $100,000 YTD salary (below the $176,100 Social Security wage base):
Social Security: 6.2% x $15,000 = $930
Medicare: 1.45% x $15,000 = $217.50
Total FICA: $1,147.50
The key takeaway: if your total taxable income keeps you below the 22% bracket, the flat method over-withholds and you can expect a refund at filing time. If your income pushes you into a higher bracket, the flat method may under-withhold.
Frequently asked questions
How are bonuses taxed federally?
Bonuses are classified as supplemental wages by the IRS. They are subject to federal income tax withholding, Social Security tax (6.2%), and Medicare tax (1.45%). Your employer uses either the flat percentage method (22%) or the aggregate method to determine how much federal income tax to withhold.
What is the flat rate withholding method?
Under the flat rate method, your employer withholds a flat 22% for federal income tax on bonuses up to $1 million. For bonus amounts exceeding $1 million, the excess is withheld at 37%. This method is simple and does not depend on your regular wages or filing status.
What is the aggregate method?
The aggregate method combines your bonus with your most recent regular paycheck and calculates withholding on the total as if it were a single payment. Your employer subtracts the tax already withheld from your regular pay to determine the bonus withholding. This can result in higher or lower withholding than the flat method depending on your income level.
Which method withholds less?
It depends on your total income. If your marginal tax rate is below 22%, the aggregate method typically withholds less. If your marginal rate is above 22%, the flat method usually withholds less. Either way, your actual tax liability is determined when you file your return, and any over-withholding is refunded.
Do I pay Social Security and Medicare on bonuses?
Yes. Bonuses are subject to FICA taxes — 6.2% for Social Security (up to the wage base of $176,100 in 2025) and 1.45% for Medicare with no cap. If your combined wages exceed $200,000 (single) or $250,000 (married filing jointly), an additional 0.9% Medicare surtax applies.
Will I get a refund if too much was withheld from my bonus?
Possibly. The flat 22% withholding rate may exceed your actual marginal tax rate, especially if your total annual income is modest. When you file your tax return, any excess withholding is refunded. Conversely, if you are in a higher bracket, you may owe additional tax.
Are bonuses taxed at the state level?
In most states with an income tax, yes. State withholding methods vary — some apply a flat supplemental rate, while others use the same rules as regular wages. Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Can I defer my bonus into a 401(k)?
It depends on your employer's plan. Many 401(k) plans allow elective deferrals from bonus payments, which reduces your taxable income for the year. Check with your HR department or plan administrator. The 2025 annual contribution limit is $23,500 ($31,000 if age 50+).
Sources
Your bonus tax also depends on where you live.
State taxes can significantly change your total liability. See how it varies.