Most bonuses are withheld at a flat 22% federal rate — 37% only on the portion of cumulative supplemental wages over $1 million in a year — plus FICA and any state withholding. On a $10,000 bonus with 5% state withholding, that leaves $6,535. And the 22% is withholding, not your final tax.
Bonuses are supplemental wages
The IRS treats a bonus as a supplemental wage — pay that sits on top of regular wages. Publication 15 (2026), §7, “Supplemental Wages,” covers the category: bonuses, commissions, overtime pay in some arrangements, severance pay, and similar payments. What matters for your check is how the payment is identified. When supplemental wages are identified separately from regular wages and income tax was withheld from your regular wages, your employer may withhold under one of two methods — and your employer, not you, chooses which.
This calculator models the flat percentage method only: a flat 22% (no other percentage is allowed), with 37% on the excess over $1 million described below. The alternative is the aggregate method, which combines the bonus with your regular wages for a pay period and withholds on the total as if it were one larger regular paycheck. If your employer used the aggregate method, your paycheck will differ from this estimate — usually with more withheld on a large bonus, because the combined amount is run through the normal withholding tables. Either way, the withholding is a prepayment. The tax itself is figured on your return.
One boundary from Publication 15 worth stating: regardless of the income-tax withholding method, supplemental wages are subject to Social Security, Medicare, and FUTA taxes. FUTA is paid by the employer and is never withheld from you, so it never appears in this calculator's breakdown.
The $1 million tier, explained correctly
To the extent supplemental wages paid to you by an employer during the calendar year exceed $1 million, the excess is subject to withholding at 37% (or the highest rate of income tax for the year) — withheld at 37% without regard to your Form W-4. Two details are routinely misstated elsewhere, and both are built into the formula here. First, the threshold is cumulative: per calendar year, per employer (including businesses under common control). It is not per payment. A $100,000 bonus in December is split if you already received $950,000 of supplemental wages that year: $50,000 of room remains under $1 million, so $50,000 is withheld at 22% and $50,000 at 37%. Second, only the excess is withheld at 37% — the first $1 million keeps the 22% rate. That split is why the year-to-date input exists. Ignore it, and the federal line is wrong for exactly the readers with the largest bonuses.
Why the check looks “taxed harder” — and why it usually is not
A bonus check often shows a withholding percentage well above what a normal paycheck shows, and it feels like the bonus was taxed at a special, higher rate. It was not. The 22%/37% figures are withholding rates, not the tax rate on the bonus. A bonus is ordinary income; at filing it is taxed at your own marginal rates like regular wages, and any over- or under-withholding is settled on the return — a refund, or an amount owed. A bonus is not taxed at a higher final rate than salary.
The gap between withholding and final tax cuts both ways. If your marginal rate is 12%, a 22% withholding overshoots and the excess returns at filing. If your marginal rate is 32% or 35%, the flat 22% undershoots and you may owe the difference — a genuine planning point for large bonuses, and a reason to check the effective withholding rate this page reports against your own bracket before spending the net.
FICA on a bonus — and the wage-base caveat
FICA is Social Security at 6.2% plus Medicare at 1.45% — 7.65% combined (rates per IRS Topic No. 751 and Publication 15 (2026)). This calculator includes FICA by default as a flat 7.65% of the bonus, with Social Security and Medicare itemized. The toggle exists for one specific situation: Social Security tax stops at the year's wage base — $184,500 for 2026 — while Medicare has no cap. If your total wages for the year have already reached the wage base, the 6.2% part no longer applies to this bonus and the flat 7.65% overstates your FICA. Switch the toggle off to see the no-FICA lines, and read the caveat beside the toggle: an extra 0.9% Additional Medicare Tax withholding can apply on wages over $200,000 in a year, and neither adjustment is modeled here. Toggling FICA never changes the federal or state lines — try it on the worked example below and watch only the FICA rows move.
Worked example
An employee receives a $10,000.00 bonus, with no supplemental wages yet this year, a 5% state withholding rate, and FICA on. The calculator is pre-filled with exactly this case:
- Room under $1M: $1,000,000 — the whole bonus sits at 22%; portion at 37%: $0.00
- Federal withholding: $10,000.00 × 22% = $2,200.00
- Social Security: $10,000.00 × 6.2% = $620.00; Medicare: $10,000.00 × 1.45% = $145.00; FICA: $765.00
- State withholding: $10,000.00 × 5% = $500.00
- Total withheld: $2,200.00 + $765.00 + $500.00 = $3,465.00
- Net bonus: $6,535.00 — you keep 65.35%; the effective withholding rate is 34.65%
Switch FICA off on the same bonus and only the FICA lines change: total withheld falls to $2,700.00 and the net rises to $7,300.00. Overtime pay, by contrast, is regular pay — it is not withheld under these supplemental rules at all. The Overtime Pay Calculator computes that gross in the first place.