Bonus Tax (Withholding) Calculator
Estimate how much federal tax will be withheld from your bonus using the flat 22% method or aggregate method.
📅 Tax Year:
Calculate Bonus Withholding
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How It Works
Bonuses are "supplemental wages" and can be withheld using two IRS-approved methods:
Flat Rate Method (Most Common)
- 22% federal withholding on bonuses up to $1 million
- 37% on bonus amounts exceeding $1 million
- Simple, predictable, used by most employers
Aggregate Method
- Bonus added to regular wages for that pay period
- Tax calculated on combined amount at marginal rates
- May result in higher withholding initially
Important Notes
Withholding is NOT your actual tax liability. At year-end, your bonus is taxed at your marginal rate like regular income. If too much was withheld, you'll get a refund.
Examples
Example 1: $10,000 Bonus, Flat Method
Withholding: $10,000 × 22% = $2,200
Net bonus: $7,800
Example 2: $1,500,000 Bonus, Flat Method
First $1M: $1,000,000 × 22% = $220,000
Excess $500K: $500,000 × 37% = $185,000
Total:
$405,000
Frequently Asked Questions
Are bonuses taxed at 22%?
Bonuses are withheld at 22%, but your actual tax rate depends on
your total income. The 22% is just withholding, not your final tax rate on the bonus.
Which method results in less withholding?
It depends on your income. The flat method often withholds less for
high earners. If your marginal rate is below 22%, the aggregate method may withhold more
initially.
Can I choose the withholding method?
Your employer chooses the method. Most use the flat 22% method
because it's simpler. You generally cannot request a specific method.
What about FICA taxes on bonuses?
Bonuses are also subject to Social Security (6.2% up to wage base)
and Medicare (1.45%) taxes, just like regular wages.
Why is my bonus taxed so much?
Withholding is designed to approximate your tax liability. If 22% is
higher than your actual marginal rate, you'll get the difference back as a refund.
What if my bonus pushes me into a higher bracket?
Only the portion of income in the higher bracket is taxed at that
rate. A bonus doesn't retroactively change the rate on your regular wages.