Bonus Tax Calculator 2026

Q: Why is my bonus taxed at 22% instead of my regular tax rate?

Bonuses are 'supplemental wages' — employers withhold a flat 22% (IRS Pub 15-T). This is just withholding, not your actual tax rate. Your real tax depends on your total income and marginal bracket. You reconcile the difference when you file.

Q: Is a bonus taxed differently than regular salary?

No. Bonuses are taxed at the same progressive rates as salary. The 22% flat withholding is a convenience — your actual tax is determined by total taxable income when you file your return.

Q: What happens to bonuses over $1 million?

The IRS requires 37% mandatory withholding on supplemental wages above $1M in a calendar year. The first $1M is withheld at 22%. State taxes and FICA apply on top.

Q: Can I reduce taxes on my bonus with a 401(k) contribution?

Yes. Pre-tax 401(k) contributions reduce taxable income dollar-for-dollar. 2026 limits: $24,500 base, $32,500 (age 50-59/64+), $35,750 (age 60-63 super catch-up via SECURE 2.0). 401(k) does NOT reduce FICA taxes.

Q: What is the difference between flat and aggregate withholding methods?

The flat method withholds 22% on the bonus as a separate check. The aggregate method combines bonus with your regular paycheck and withholds based on annualized tax tables — often resulting in higher withholding. Your actual tax liability is the same either way; you reconcile at filing.

Your bonus is taxed at a flat 22% — but that's just withholding. See what you actually owe, and how to keep more.

Calculate your take-home bonus after federal, state, and FICA taxes

Bonus amount

Annual salary

Your regular W-2 wages (before bonus)

Filing status

State

YTD earnings

Auto-calculated from salary. Adjust if different.

Pay period for bonus

How your employer pays the bonus

Age

For 401(k) catch-up eligibility

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Your bonus is NOT taxed at 22%. That's just withholding. Your actual tax depends on your total income and marginal bracket. The difference shows up on your tax return.

Try a scenario

How to Use This Calculator

Tab "My Bonus After Tax"

Enter your bonus amount, annual salary, filing status, and state. The calculator applies the IRS flat 22% supplemental withholding rate (37% on any portion above $1M), plus FICA taxes (Social Security 6.2% up to the $184,500 wage base, Medicare 1.45%, and the 0.9% Additional Medicare Tax above $200K/$250K). Your state's supplemental withholding rate is applied automatically. Then it compares withholding to your actual marginal tax on the bonus — so you can see if you'll get a refund or owe at tax time.

Tab "Withholding vs Actual Tax"

The IRS withholds 22% flat on bonuses — but your actual marginal rate depends on your total income. This tab compares two methods: the 22% flat method (separate bonus check) and the aggregate method (bonus added to your regular paycheck). It shows the exact dollar difference between withholding and your real tax liability, plus your true cost after all taxes including FICA and state.

Tab "Maximize My Bonus"

Your bonus is a unique opportunity to shelter income. This tab runs three strategies: Max 401(k) (using 2026 limits: $24,500 base, $32,500 age 50+, $35,750 age 60-63), HSA ($4,400/$8,750 with triple tax benefit), and Roth conversion (pay tax now for tax-free growth). It calculates the optimal order — employer match first, then HSA, then Roth — and shows your net bonus after the optimal strategy.

The Formulas

22% Flat Method (IRS Pub 15-T 2026):
Federal withholding = Bonus × 22% (up to $1,000,000)
37% on any portion above $1,000,000

Aggregate Method:
1. Combine bonus + regular paycheck
2. Annualize the combined amount
3. Calculate federal tax on annualized amount
4. Subtract regular withholding = Extra withheld for bonus

Actual Tax (marginal method):
Tax on (salary + bonus − deductions) − Tax on (salary − deductions) = True tax on bonus
Compare to flat withholding → refund or amount owed

FICA Taxes on Bonus:
Social Security: 6.2% × bonus (only on wages up to $184,500 cap)
Medicare: 1.45% × bonus (no cap)
Additional Medicare: 0.9% × wages above $200K single / $250K MFJ

401(k) Shelter (2026 limits):
Base limit: $24,500
Age 50-59 or 64+: $24,500 + $8,000 = $32,500
Age 60-63 (super catch-up): $24,500 + $11,250 = $35,750
Tax saved = Amount sheltered × Marginal tax rate

The 22% flat rate is unchanged by OBBBA and applies to all supplemental wages (bonuses, commissions, overtime paid separately). The aggregate method — where your employer adds the bonus to your regular paycheck and withholds based on annualized income — often results in higher withholding but the same actual tax liability. Either way, you reconcile at filing.

Example

Marcus — Software Engineer, Age 34, Single, California

Annual salary $130,000. Receives a $15,000 year-end bonus. Currently contributes 6% to 401(k).

Bonus amount$15,000

Federal withholding (22% flat)$3,300

Social Security (6.2%)$930

Medicare (1.45%)$218

CA state withholding (10.23%)$1,535

Total withheld$5,983

Take-home bonus$9,017

But Marcus is actually in the 24% federal bracket (salary + bonus = $145K). His real federal tax on the bonus is $3,600 — he'll owe an extra $300 at tax time. The calculator's Tab 2 showed him this gap immediately. He used Tab 3 to direct $10,000 of his bonus to his 401(k), saving $2,400 in federal tax and $1,023 in CA tax.

State Supplemental Withholding Rates (2026)

State	Rate
Alabama	5.00%
Alaska	0%
Arizona	2.50%
Arkansas	3.90%
California	10.23%
Colorado	4.40%
Connecticut	6.99%
Delaware	6.60%
Florida	0%
Georgia	5.49%
Hawaii	7.25%
Idaho	5.30%
Illinois	4.95%
Indiana	3.05%
Iowa	3.80%
Kansas	5.00%
Kentucky	4.00%
Louisiana	4.25%
Maine	5.00%
Maryland	5.75%
Massachusetts	5.00%
Michigan	4.25%
Minnesota	6.25%
Mississippi	4.70%
Missouri	4.70%
Montana	5.00%
Nebraska	3.50%
Nevada	0%
New Hampshire	0%
New Jersey	6.37%
New Mexico	5.90%
New York	11.70%
North Carolina	4.09%
North Dakota	1.50%
Ohio	3.50%
Oklahoma	4.50%
Oregon	8.00%
Pennsylvania	3.07%
Rhode Island	5.99%
South Carolina	6.44%
South Dakota	0%
Tennessee	0%
Texas	0%
Utah	4.65%
Vermont	6.60%
Virginia	5.75%
Washington	0%
Washington DC	6.75%
West Virginia	4.70%
Wisconsin	5.53%
Wyoming	0%

Frequently Asked Questions

Why is my bonus taxed at 22% instead of my regular tax rate?▼

Bonuses are classified as "supplemental wages" by the IRS. Employers can use the flat 22% withholding rate (Pub 15-T) instead of calculating based on your actual bracket. This is just withholding — not your final tax. Your actual tax rate on the bonus depends on your total annual income and marginal bracket. If you're in a higher bracket, you'll owe more at filing. If you're in a lower bracket, you'll get a refund. The 22% is simply a convenient approximation.

Is a bonus taxed differently than regular salary?▼

No — bonuses are taxed at the same rates as regular income. The confusion comes from withholding. Your employer withholds 22% flat on bonuses (supplemental wage method), which often differs from your actual marginal rate. When you file your tax return, all income — salary and bonus — is combined and taxed under the same progressive bracket system. The 22% flat withholding is just a convenience; your actual tax is determined by your total taxable income.

What happens to bonuses over $1 million?▼

For supplemental wages exceeding $1 million in a calendar year, the IRS requires mandatory 37% withholding on the portion above $1M. The first $1M is still withheld at 22%. This 37% rate matches the top federal bracket, so for high earners it's roughly accurate. State taxes, FICA, and Additional Medicare Tax (0.9%) apply on top. For a $1.5M bonus, withholding would be: $220,000 (22% on first $1M) + $185,000 (37% on $500K) = $405,000 federal, plus FICA and state.

Can I reduce taxes on my bonus with a 401(k) contribution?▼

Yes — directing your bonus to a pre-tax 401(k) is one of the most effective tax shelters available. The 2026 limit is $24,500 (base), $32,500 if you're 50-59 or 64+, and $35,750 if you're 60-63 (SECURE 2.0 super catch-up). Every dollar contributed reduces your taxable income dollar-for-dollar. At a 24% marginal rate, sheltering $10,000 saves $2,400 in federal tax alone plus state tax savings. Note: 401(k) does NOT reduce FICA taxes. Also, if your FICA wages exceeded $150,000 in 2025, your catch-up contributions must be Roth (after-tax) starting in 2026.

What is the difference between flat and aggregate withholding methods?▼

The flat method withholds a straight 22% on the bonus (37% above $1M). It's used when the bonus is paid as a separate check. The aggregate method combines your bonus with your most recent regular paycheck, annualizes the total, and calculates withholding using the standard tax tables. This often results in higher withholding because the combined amount pushes you into a higher annualized bracket. However, your actual tax liability is the same regardless of method — you reconcile at filing. Use Tab 2 to see the exact difference for your situation.

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