Bonus Tax Calculator
See how much of your bonus is withheld for federal income tax and compare two withholding methods. The IRS classifies bonuses as supplemental wages and allows employers to use either a flat 22% federal income tax withholding rate (on supplemental wages up to $1,000,000 per calendar year) or the aggregate method, which adds the bonus to your most recent regular paycheck and recalculates withholding on the combined amount. This calculator shows both methods side by side and applies the correct FICA taxes: 6.2% Social Security (capped at the 2025 wage base of $176,100) and 1.45% Medicare (no cap), plus 0.9% additional Medicare if your combined wages exceed $200,000 for single or $250,000 for married filing jointly. Enter your bonus amount, filing status, annual salary, pay frequency, and any prior supplemental wages paid in the year. The calculator instantly compares the two withholding approaches and notes whether the bonus exceeds the $1,000,000 threshold triggering higher withholding. Remember that withholding is merely a prepayment of your annual tax liability; at year-end any over- or under-withholding is reconciled on your Form 1040. FAQs explain the withholding methods, the $1 million threshold, and tax treatment of equity compensation like RSUs.
Under the IRS flat-rate (percentage) method, bonuses up to $1,000,000 are withheld at a flat 22% federal income tax, plus 6.2% Social Security and 1.45% Medicare. On a $10,000 bonus: federal withholding is $2,200, FICA is $765, net take-home is roughly $7,035 (before state tax).
Your employer chooses the withholding method. The flat rate is most common for a separate bonus check. Either way, your final tax liability is the same; any over- or under-withholding is reconciled when you file your return.
How bonus tax withholding works
The IRS treats bonus pay as "supplemental wages," defined in IRS Publication 15 (Circular E) as compensation paid in addition to regular wages, including bonuses, commissions, overtime pay (when paid separately), severance, back pay, prizes, and awards. Two withholding methods are permitted.
Flat-rate (percentage) method
When a supplemental wage payment is made separately from regular wages (or combined but clearly identified), the employer may withhold at a flat rate. The 2025 rates from IRS Rev. Proc. 2024-40 are:
Federal withholding = bonus x 22% (for cumulative supplemental wages up to $1,000,000)
Federal withholding = $220,000 + (bonus excess above $1M) x 37%
SS tax = min(bonus, max(0, $176,100 - YTD wages)) x 6.2%
Medicare tax = bonus x 1.45%
Additional Medicare = bonus x 0.9% (only if total wages exceed $200k single / $250k MFJ)
Net bonus = gross - federal - SS - Medicare - additional Medicare
Aggregate method
Add the bonus to the employee's most recent regular paycheck. Calculate withholding on the combined amount using the annualised percentage method at the employee's filing status. Subtract the withholding already taken from the regular paycheck alone. The remaining amount is the bonus withholding. FICA applies the same way as under the flat-rate method.
Regular per-period pay = annual salary / pay periods
Regular annual withholding = bracket_table(regular pay x pay periods, filing status)
Combined annual withholding = bracket_table((regular pay + bonus) x pay periods, filing status)
Bonus federal withholding = (combined - regular annual withholding) / pay periods
Worked example: $10,000 bonus, flat-rate method
- Federal income tax: $10,000 x 22% = $2,200.00
- Social Security: $10,000 x 6.2% = $620.00 (assuming under the $176,100 wage base)
- Medicare: $10,000 x 1.45% = $145.00
- Total withheld: $2,200 + $620 + $145 = $2,965.00
- Net bonus: $10,000 - $2,965 = $7,035.00
State income tax withholding is not included. Most states with an income tax also require withholding on supplemental wages; check your state revenue agency for the applicable rate.
2025 federal income tax brackets used in the aggregate method
The aggregate method uses the IRS annualised percentage method from Rev. Proc. 2024-40. Standard deductions for 2025: $15,000 (single / MFS), $30,000 (MFJ), $22,500 (head of household).
| Rate | Single taxable income | Married filing jointly |
|---|---|---|
| 10% | $0 - $11,925 | $0 - $23,850 |
| 12% | $11,926 - $48,475 | $23,851 - $96,950 |
| 22% | $48,476 - $103,350 | $96,951 - $206,700 |
| 24% | $103,351 - $197,300 | $206,701 - $394,600 |
| 32% | $197,301 - $250,525 | $394,601 - $501,050 |
| 35% | $250,526 - $626,350 | $501,051 - $751,600 |
| 37% | Over $626,350 | Over $751,600 |
Source: IRS Rev. Proc. 2024-40, Table 1 and Table 2. Taxable income = gross income minus standard deduction.
Bonus tax: frequently asked questions
Why is my bonus taxed at 22%?
The IRS classifies bonuses as supplemental wages. When an employer pays a bonus separately from regular wages, federal income tax withholding is applied at a flat 22% rate under the percentage method (IRS Publication 15, Section 7). This 22% is a withholding convenience, not a separate tax rate. At year-end your bonus is added to all other income and taxed at your actual marginal bracket. If 22% was too high, you get a refund; if too low, you owe the difference.
Will I get money back if too much was withheld from my bonus?
Yes. Withholding is a prepayment of your annual tax liability. If the total withholding across all your income sources for the year exceeds your actual tax owed (based on your filing status, deductions, and credits), the excess is refunded when you file your return. This often happens when 22% withholding on a bonus exceeds your effective marginal rate.
What is the $1 million supplemental wage threshold?
Under IRS Publication 15, the flat supplemental withholding rate is 22% only for the first $1,000,000 of supplemental wages paid to an employee in a calendar year. Any supplemental wages above that cumulative $1,000,000 must be withheld at 37%. Most employees never approach this threshold; it primarily affects very high earners who receive large bonuses or commissions throughout the year.
Does FICA apply to bonuses?
Yes. Social Security tax (6.2%) and Medicare tax (1.45%) apply to bonuses in the same way they apply to regular wages. Social Security tax stops once cumulative 2025 wages reach the wage base of $176,100 (Social Security Administration, SSA.gov). Medicare has no wage cap. An additional 0.9% Medicare surtax applies to wages over $200,000 for single filers ($250,000 for married filing jointly), per IRS Rev. Proc. 2024-40.
What is the aggregate method and when is it used?
Under the aggregate method, the employer adds the bonus to the employee's most recent regular paycheck, calculates withholding on the combined amount using the normal payroll tables, then subtracts withholding already taken from the regular paycheck. The difference is the bonus withholding. This method is typically used when the bonus is included in a regular paycheck rather than paid separately. It can result in more or less than 22% depending on whether the combined pay pushes the employee into a higher bracket.
Are stock options or RSUs taxed the same way?
RSU vesting is treated as supplemental wages at the time shares vest, so the same 22% flat withholding (or aggregate method) generally applies. Nonqualified stock options (NSOs) are also taxed as supplemental wages at exercise. Incentive stock options (ISOs) have different rules: there is no withholding for regular income tax at exercise, though the spread may trigger alternative minimum tax. For RSUs and NSOs, FICA also applies at vesting or exercise, subject to the same wage-base rules.
Official sources
- Supplemental wage withholding (percentage and aggregate methods): IRS Publication 15 (Circular E), Employer's Tax Guide.
- 2025 tax brackets, standard deductions, supplemental withholding rates: IRS Rev. Proc. 2024-40.
- 2025 Social Security wage base ($176,100): Social Security Administration, Contribution and Benefit Base.
- FICA rates and additional Medicare surtax: IRS Topic 751, Social Security and Medicare Withholding Rates.
Reviewed by the CalculatorHub team, edited by James Graham, 12 June 2026. See our methodology. General information only, not financial or tax advice.