Bonus Tax Withholding Calculator
For marginal bracket comparison.
CA 10.23%, NY 11.7%, NJ ~5.5%; many use marginal.
2026 SS wage base $184,500. If you've already exceeded the cap YTD, no SS tax on bonus.
Withholding method
Percentage: 22% federal flat (most common). Aggregate: combined with regular paycheck using Pub 15-T tables.
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How to use
- 1 Enter the gross bonus amount (signing bonus, year-end bonus, performance bonus, commission, severance, etc.).
- 2 Enter your annual salary (helps calculate marginal bracket and Additional Medicare threshold).
- 3 Choose filing status. Affects Additional Medicare 0.9% threshold ($200K single, $250K MFJ).
- 4 Choose withholding method: Percentage Method (default IRS 22% flat) or Aggregate (combine bonus + paycheck and apply tables — more accurate for low earners).
- 5 Enter state income tax rate. Click Calculate to see federal WH, FICA, state, total, net bonus, and over/under-withholding alert vs your marginal rate.
About Bonus Tax Withholding Calculator
FAQ
Q How are bonuses taxed in 2026?
IRS Pub 15-T treats bonuses as "supplemental wages." Federal withholding is 22% flat on bonuses up to $1M (37% on the portion above $1M). Plus FICA (6.2% SS to $184,500 + 1.45% Medicare + 0.9% Add'l over $200K). Plus state withholding. Net retention typically 60-75%.
Q Why is my bonus withheld at a higher rate?
IRS uses 22% supplemental rate by default — same as the 22% bracket. If your marginal rate is LOWER (12% bracket), you'll get a refund at filing. If HIGHER (24%, 32%, 35%, 37%), you'll owe more at filing. The 22% is just a withholding heuristic, not your real rate.
Q Can I get my bonus tax-free?
NO — bonuses are fully taxable income. But you can DEFER tax: contribute to 401(k) (up to $23,500 in 2026 + $7,500 catch-up if 50+); max HSA ($4,400/$8,750 + $1,000 if 55+); donate appreciated stock to offset income; tax-loss harvest investments to offset gains.
Q What if my bonus pushes me into a higher bracket?
Only the PORTION over the bracket threshold pays the higher rate. Example: $100K salary + $20K bonus = $120K. You're in the 24% bracket starting $105,700. Only $14,300 of the bonus is taxed at 24%; the rest is at 22%. Marginal taxation, not flat.
Q How is a $1M+ bonus taxed?
First $1M: 22% federal supplemental rate. Above $1M: 37% federal mandatory withholding (highest bracket). Example: $1.5M bonus = $1M × 22% + $500K × 37% = $405,000 federal WH. Plus FICA + state. This is mandatory under §3402(g) — employers cannot use lower rates.
Q Should I have my bonus combined with regular pay?
AGGREGATE method: bonus + regular paycheck combined and Pub 15-T tables applied. More accurate for LOW earners (12% bracket) — withholds at correct lower rate vs default 22%. PERCENTAGE method (22% flat) is simpler and over-withholds for low earners (refund). Ask employer to choose.
Q Can I defer my bonus to lower my taxes?
YES — many employers allow deferral via NQDC (Non-Qualified Deferred Compensation) plans. Defer to retirement when income is lower. Caution: NQDC has IRC §409A rules; election deadline before bonus paid; employer credit risk. Best for executives with predictable income drops.
Q Are signing bonuses different from year-end bonuses?
Tax treatment IDENTICAL — same 22% supplemental rate. Difference: signing bonus often has CLAWBACK clause (must repay if you leave within 1-2 years). The repayment is messy: you can't reverse the FICA already paid; only future tax credit. Negotiate clawback period and prorated terms.
Official resources
IRS Publication 15-T (2026) — Supplemental Wage Withholding
Internal Revenue Service official 2026 Pub 15-T detailing the 22% supplemental wage rate for bonuses and commissions.
IRS — Supplemental Wages Topic 401
IRS official guide to bonuses, commissions, and other supplemental wage tax treatment.
IRS Publication 525 — Taxable Income
Comprehensive IRS publication on what counts as taxable wages including bonuses, gifts, and stock options.
IRS — Form W-4 Adjustments
Use Form W-4 line 4c to add extra per-paycheck withholding if your bonus pushes you over the 22% rate.