Bonus Tax Calculator
See what you actually keep from a 2026 bonus after federal, state and FICA tax, and why the flat 22% withheld rarely matches the tax you really owe on it.
How to use this calculator
- 1Enter the gross bonus before any deduction.
- 2Enter your regular annual salary, since that determines which brackets the bonus falls into.
- 3Add your marginal state rate if your state taxes income.
- 4Compare "total tax" against "withheld at source" — the difference is what you will owe, or get back, at filing.
How the calculation works
Tax on bonus = tax(salary + bonus) − tax(salary) + FICA on the bonus + state tax. Withheld = bonus × 22% (37% above $1m) + FICA + state- tax(...)
- The full 2026 federal bracket calculation, so the bonus is taxed at the rates it actually reaches
- 22%
- The flat statutory withholding rate on supplemental wages up to $1,000,000 a year
A bonus is supplemental wages. The employer may withhold at the flat rate or by aggregating it with regular pay; the flat rate is by far the more common, and it is what this models.
Withholding is not the tax. The flat rate is a payment on account — the real liability is settled on your return, which is why a bonus can produce either a bill or a refund depending on your bracket.
The marginal figure is computed by running the bracket schedule twice rather than applying one rate, because a large bonus usually spans two or more brackets.
Worked example
A $20,000 bonus on a $120,000 salary
- 1.Salary of $120,000 puts the bonus into the 24% federal bracket for a single filer in 2026.
- 2.Federal tax on the bonus is therefore about 24% of it, while only 22% was withheld.
- 3.Medicare at 1.45% applies to all of it; Social Security applies to whatever part still fits under the $184,500 wage base.
- 4.The roughly two-percentage-point federal gap is settled when the return is filed.
Result: Around three-quarters of the bonus kept, with a small amount still owed
Why a bonus feels like it is taxed at a punishing rate
The common belief is that bonuses are taxed more heavily than salary. They are not. A bonus is ordinary income taxed at exactly the same rates as everything else you earn. What differs is only the withholding.
Because a bonus is classified as supplemental wages, employers are permitted to withhold federal tax at a flat statutory rate — 22% on the first $1,000,000 of supplemental wages in a calendar year, and 37% on anything above that. That rate takes no account of your salary, your filing status or your deductions. It is a blunt instrument applied identically to someone earning $40,000 and someone earning $400,000.
For a lower earner the flat 22% over-withholds, and the excess returns as a larger refund. For a higher earner in the 32% or 35% bracket it under-withholds, and the shortfall is owed at filing. Either way the money that disappears on the payslip is not the final tax — it is an estimate, and frequently a poor one.
The bracket myth, stated plainly
A persistent worry is that a bonus could push you into a higher bracket and leave you worse off than if you had not received it. This cannot happen under a progressive system.
Tax brackets apply to slices of income, not to the whole. If the 24% band ends at $105,700 and you earn a dollar more, that single dollar is taxed at the next rate — not your entire income. Earning more always leaves you with more after tax. The only genuine cliff effects in the US system come from credits and thresholds that phase out abruptly, not from the rate brackets themselves.
What this assumes, and where it stops
Assumptions
- The bonus is withheld at the flat supplemental rate rather than by the aggregate method.
- Your salary figure is your full regular wages for the year, and no other supplemental payments have been made.
- State tax is applied as one flat marginal rate to the bonus.
- Standard deduction is used; itemising or credits will move the real figure.
Limitations
- Pre-tax deferrals from the bonus — 401(k), HSA — are not modelled and reduce both the tax and the amount you receive.
- The aggregate withholding method, which some employers use, produces different withholding from the flat rate shown.
- State bracket systems are simplified to one rate here.
- This estimates tax on one bonus, not your whole return.
Common questions
Are bonuses taxed at a higher rate than my salary?
No. A bonus is ordinary income taxed at exactly the same brackets as your salary. What differs is withholding: employers apply a flat 22% federal rate to supplemental wages up to $1,000,000, regardless of your actual bracket. That is why a bonus can look heavily taxed on the payslip while the real liability, settled on your return, is either higher or lower than what was taken.
Can a bonus push me into a higher tax bracket and leave me worse off?
No. Brackets apply only to the income inside each band, never to your whole income. If a bonus takes you past a threshold, only the amount above that threshold is taxed at the higher rate. Receiving more money always leaves you with more after tax. The idea that a raise or bonus can reduce take-home pay is one of the most persistent misunderstandings in personal tax.
Can I reduce the tax on my bonus?
Sometimes, by changing where the money goes rather than the rate. Deferring part of a bonus into a 401(k) or HSA reduces taxable income in the year received, and some employers allow a bonus deferral election before payment. Charitable giving in the same year can also offset it if you itemise. Once the bonus is paid as ordinary wages, though, the rate itself is fixed by your total income.
Sources
- Publication 15 (Circular E), Employer's Tax Guide — Supplemental Wages — US Internal Revenue Service
- Revenue Procedure 2025-32 — 2026 inflation adjustments — US Internal Revenue Service
Formula and content last reviewed on .
Results are estimates for information only, not professional advice.
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