Bonus Tax Calculator
Bonus Tax Calculator
Use Percentage for separately issued bonus checks. Use Aggregate if the bonus is combined with regular wages.
Used to determine your marginal bracket for the aggregate method and Additional Medicare Tax threshold.
Pre-Tax Deductions from Bonus
Enter Your Bonus Amount
Fill in your bonus amount, filing status, and state to see your estimated take-home pay and full tax breakdown.
See exactly how much of your bonus you'll actually take home
When your employer hands you a bonus check, the number on the stub is rarely what lands in your bank account. Federal income tax, Social Security, Medicare, and state withholding all take their cut before you see a dime — and depending on how your employer processes the payment, the withholding method can swing your take-home pay by hundreds or even thousands of dollars. This Bonus Tax Calculator helps you model every scenario so you know exactly what to expect. The IRS allows employers to use two main methods for withholding federal income tax on supplemental wages like bonuses: the percentage method (a flat 22% on amounts up to $1 million, 37% above) and the aggregate method (which adds your bonus to your regular wages and withholds at your normal income bracket). The percentage method is simpler and most common for separately issued bonus checks; the aggregate method tends to produce withholding that more closely matches your actual marginal tax rate. Beyond federal income tax, every bonus is also subject to FICA taxes — Social Security at 6.2% up to the annual wage base ($184,500 for 2026) and Medicare at 1.45% with no cap. High earners above $200,000 (single) or $250,000 (married filing jointly) also owe an Additional Medicare Tax of 0.9% on earnings over the threshold. Our calculator accounts for year-to-date earnings so the Social Security cap is applied accurately, and it flags the Additional Medicare Tax when applicable. State withholding adds another layer of complexity. Twenty-two states publish a specific supplemental wage rate for bonuses — ranging from 1.5% in North Dakota to 11.7% in New York — while nine states have no income tax at all, and the rest use their standard withholding tables. Our calculator pre-populates the correct rate for all 51 jurisdictions (50 states plus D.C.) and lets you override it if your situation is different. Pre-tax deductions are one of the most powerful levers you have. Contributing your bonus to a 401(k) or 403(b), a Health Savings Account, or a health insurance premium reduces your taxable bonus before any withholding rates are applied, generating immediate tax savings on every dollar deducted. The calculator shows you the exact dollar value of those savings. For employees who want to ensure a colleague or themselves receives a specific net amount — a common practice for executive relocation allowances or signing bonuses — our gross-up mode works backward from the desired net figure to calculate the gross bonus your employer would need to issue. The quick preset buttons ($5k, $10k, $25k, $50k) make scenario planning fast, and the method comparison table lets you see side-by-side what you'd take home under each withholding approach. The results section also includes a net bonus allocation guide suggesting how to divide your windfall across an emergency fund, retirement savings, debt payoff, investments, and discretionary spending — a practical starting point for making the most of your bonus.
Understanding Bonus Taxation
What Are Supplemental Wages?
The IRS classifies bonuses, commissions, overtime, back pay, and similar irregular payments as supplemental wages. They are treated separately from regular salary wages for withholding purposes, which is why your bonus stub often shows a higher withholding percentage than your normal paycheck. Federal law gives employers two approved methods for calculating withholding on these payments: the percentage method (also called the flat-rate method) and the aggregate method. The choice between them can meaningfully affect how much is withheld — though not how much you ultimately owe in taxes, since your actual liability is settled when you file your return.
Percentage vs. Aggregate Method
The percentage method withholds a flat 22% on supplemental wages up to $1 million paid to the same employee in a calendar year. If cumulative supplemental wages exceed $1 million, the excess is withheld at 37%. This method is straightforward and most commonly used when a bonus is issued as a separate check. The aggregate method combines the bonus with the employee's regular wages for the pay period and applies Publication 15 bracket tables to find withholding on the combined amount, then subtracts what would have been withheld on the regular wages alone. The difference is withheld from the bonus. This method is required when the bonus is combined on the same paycheck as regular wages.
Why the Withholding Method Matters
If your marginal federal income tax rate is lower than 22% — for example, 12% for a single filer earning around $40,000 — the percentage method over-withholds federal income tax on your bonus. You will get that money back when you file your return, but it's essentially an interest-free loan to the government in the meantime. Conversely, if your marginal rate is 32% or 35%, the 22% flat withholding will under-withhold, and you may owe a balance in April. Understanding which method your employer uses and what your marginal rate is helps you plan — either by adjusting estimated tax payments or by revisiting your W-4 withholding allowances.
Important Limitations
This calculator provides estimates based on 2025 and 2026 federal and state tax parameters. Actual withholding depends on your specific W-4 elections, your employer's payroll system, and state-specific withholding tables that may differ from the flat supplemental rates shown. Some states use tiered or income-dependent rates not fully captured by a single flat percentage. Vermont's withholding is computed as 30% of the federal withholding amount, which is approximated here. Local city taxes require manual entry of the local rate. The gross-up calculation assumes a simplified combined rate. Always verify with a tax professional before making financial decisions.
How to Use the Bonus Tax Calculator
Enter Your Bonus and Filing Details
Type your gross bonus amount (or switch to Gross-Up mode and enter your desired take-home). Select your bonus type, tax year, federal withholding method, filing status, and annual salary. The calculator auto-recalculates as you type.
Choose Your State
Select your state from the dropdown. Pre-populated supplemental withholding rates appear automatically for all 51 jurisdictions. Use the State Rate Override field in Advanced Options if your employer uses a different rate.
Add Pre-Tax Deductions
Enter any 401(k), health insurance, or HSA amounts you plan to withhold from the bonus. These reduce your taxable bonus before rates are applied, and the calculator shows your total tax savings from these deductions.
Review Results and Compare Methods
The results show your net take-home, a full itemized tax breakdown, an effective rate ring, and a side-by-side comparison of the percentage vs. aggregate method. Export to CSV or print for your records.
Frequently Asked Questions
Why is my bonus taxed at 22% when my regular income tax rate is lower?
When a bonus is paid as a separate check, the IRS allows employers to use the percentage method — a flat 22% federal withholding rate on supplemental wages up to $1 million. This is simply a withholding convenience, not your actual tax rate. If your true marginal rate based on your total income is lower than 22%, you will receive the over-withheld amount back as a refund when you file your return. Conversely, if your marginal rate is higher than 22%, you may owe additional taxes in April. The flat rate does not change your underlying tax liability — it only affects timing and cash flow.
What is the aggregate method and when is it used?
The aggregate method withholds federal income tax on a bonus by adding it to the employee's regular wages for the pay period, calculating withholding on the combined amount using Publication 15 bracket tables, then subtracting what would have been withheld on regular wages alone. The difference is withheld from the bonus. This method is required when the bonus is included on the same paycheck as regular wages. For many employees it produces withholding that more closely approximates their actual marginal tax rate, reducing the over- or under-withholding common with the flat 22% percentage method.
Does Social Security apply to my bonus?
Yes, Social Security tax of 6.2% applies to bonus income just like regular wages — but only up to the annual wage base. For 2026 the wage base is $184,500. If your year-to-date wages have already exceeded the wage base before you receive your bonus, no additional Social Security tax is owed on the bonus. Enter your YTD earnings in Advanced Options to have the calculator apply the cap correctly. Medicare at 1.45% applies to all earned income with no cap, and an Additional Medicare Tax of 0.9% applies to wages above $200,000 (single) or $250,000 (married filing jointly).
How do pre-tax deductions reduce my bonus taxes?
Pre-tax deductions such as 401(k) or 403(b) contributions, health insurance premiums, and HSA contributions are subtracted from your gross bonus before any tax rates are applied. For example, if you direct $3,000 of a $10,000 bonus into your 401(k), only $7,000 is subject to federal income tax, Social Security, Medicare, and state withholding. At a combined effective rate of 30%, this saves you $900 in immediate withholding and reduces your taxable income for the year. In 2026, the 401(k) contribution limit is $24,500, or $32,500 if you are age 50 or older.
What is the gross-up method and when would my employer use it?
Gross-up means your employer pays a larger bonus so that after all taxes are withheld, you receive the specific net dollar amount you were promised. It is common for relocation allowances, signing bonuses with net guarantees, and executive compensation packages. For example, if your employer wants you to net $10,000 and the combined tax rate is 35%, the gross bonus needs to be approximately $15,385. The formula is gross equals net divided by one minus the combined tax rate. Our Gross-Up mode performs this calculation automatically, showing you the required gross amount alongside the full withholding breakdown.
My state is not on the flat supplemental rate list — what rate does it use?
States like Arizona, Colorado, Connecticut, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, New Jersey, Pennsylvania, Utah, and Washington D.C. do not publish a separate supplemental withholding rate. Instead, employers in those states apply their standard withholding tables to the bonus, which can result in variable withholding depending on the employee's W-4 elections and pay frequency. Our calculator shows these states at 0% as a placeholder — use the State Rate Override field in Advanced Options to enter the actual rate your employer withholds. You can often find this on your bonus paystub or by asking your payroll department.