Bonus Calculator

Find out how much of your bonus you'll actually take home after taxes.

Bonus Amount

Federal Withholding Rate

22% is standard supplemental rate

Pay Frequency

Enter your bonus amount to see the after-tax value

How Bonuses Are Taxed

Bonuses are considered "supplemental wages" by the IRS and can be taxed using one of two methods.

Method 1: Flat Rate (Most Common)

Employers often withhold a flat 22% for federal taxes on bonuses up to $1 million. This is simpler and the most common approach.

Federal withholding: 22%
Social Security: 6.2% (up to wage base)
Medicare: 1.45%
State taxes: Varies by state

Method 2: Aggregate Method

Some employers add your bonus to your regular paycheck and withhold based on the combined total as if it were your normal pay. This can result in higher withholding if the combined amount pushes you into a higher bracket.

Will You Get Money Back?

Withholding is not the same as your actual tax liability. If too much is withheld, you'll get a refund when you file taxes. If too little, you'll owe.

The 22% flat rate often results in slight over-withholding for people in the 12% or lower brackets, meaning you may see some back at tax time. Use our take-home pay calculator to estimate your overall tax situation.

Types of Bonuses

Annual bonus: Based on company/individual performance
Signing bonus: One-time payment when joining
Spot bonus: Ad-hoc recognition for achievements
Referral bonus: For successful employee referrals
Holiday bonus: Year-end appreciation

Planning for Bonus Taxes

Don't plan to spend 100% of your gross bonus. Expect to take home 65-75% after all taxes, depending on your state and bracket.

Smart bonus uses: emergency fund, debt payoff, retirement contributions, or investments. When evaluating job offers with bonuses, use our job comparison calculator to factor in total compensation.

Disclaimer: This calculator provides estimates based on typical withholding rates for informational purposes only. Actual bonus withholding varies by employer, state, and your specific tax situation. This is not tax advice. Consult a tax professional for guidance.

Frequently Asked Questions

How much tax is taken out of a bonus?

Bonuses are typically taxed at 22% federal withholding (flat rate method) plus 7.65% for FICA (Social Security 6.2% + Medicare 1.45%), plus state taxes. Expect to take home roughly 65-75% of your gross bonus, depending on your state. For example, a $10,000 bonus may net you $6,500-$7,500 after all taxes.

Why is my bonus taxed at 40%?

Your bonus isn't actually taxed at 40% - that's the withholding rate, which may be higher than your true tax liability. If your employer uses the aggregate method (adding your bonus to your paycheck), it can push you into a higher bracket temporarily. You'll likely get a refund when you file taxes if too much was withheld.

Are bonuses taxed differently than regular pay?

Bonuses are taxed the same as regular income for your annual tax return, but they're often withheld at a different rate. Most employers use a flat 22% federal withholding for bonuses (supplemental wage rate), whereas regular paychecks use your W-4 withholding. Your actual tax rate is determined when you file your return.

How can I pay less tax on my bonus?

You can't avoid income tax on bonuses, but you can reduce taxable income by: 1) Making pre-tax 401(k) contributions with your bonus, 2) Contributing to an HSA if eligible, 3) Making charitable donations, or 4) Timing the bonus for a lower-income year if possible. The taxes owed are based on your total annual income.

Do I get my bonus withholding back?

If more tax was withheld than your actual tax liability, yes - you'll get a refund when you file your tax return. The 22% flat withholding rate often over-withholds for people in the 12% bracket or lower. Check your total tax situation annually to see if you'll get a refund or owe more.

What's the difference between a bonus and a raise?

A bonus is a one-time payment that doesn't affect your base salary or future paychecks. A raise is a permanent increase to your base pay that continues indefinitely. Bonuses don't compound over time or affect retirement contributions, while raises do. Learn more with our raise calculator.