Bonus Tax Calculator

Employers withhold bonuses using the IRS "supplemental wage" rules: a flat 22% for federal income tax (37% on any portion above $1 million), plus 7.65% for Social Security and Medicare (FICA), plus any state tax. So most people see roughly 30–40% withheld and keep about 60–70%.

No — 22% is the withholding rate, not your final tax. Your bonus is ordinary income taxed at your real marginal rate when you file. If your bracket is below 22%, you may get some back as a refund; if it is above 22%, you may owe more at tax time.

Because the flat 22% federal withholding is often higher than the rate withheld from your regular paychecks, and FICA and state tax stack on top. The money is not gone — the withholding is reconciled against your actual tax when you file your return.

Some employers use the "aggregate" method instead of the flat 22%: they add your bonus to your regular paycheck and withhold as if that were your normal pay, which can push withholding even higher temporarily. This calculator uses the more common flat 22% percentage method.

You cannot change the withholding, but you can lower your overall taxable income by directing the bonus into a 401(k) or HSA (if your employer allows), which defers the income tax. Any over-withholding comes back as a refund when you file.