Bonus Tax Calculator Guide
How Bonus Withholding Works
A cash bonus is generally supplemental wages. Federal income-tax withholding can use an optional flat percentage method when the payment is separately identified and federal income tax was withheld from regular wages in the current or immediately preceding calendar year. Otherwise payroll uses the aggregate method.
Withholding is money prepaid through payroll. It is not a separate final bonus tax rate, and it may be higher or lower than the additional income-tax liability calculated on the employee’s return.
Percentage Method vs Aggregate Method
For eligible separately identified supplemental wages at or below the calendar-year threshold, the optional percentage method withholds 22%. The aggregate method adds the bonus to regular wages for a payroll period, calculates withholding on the combined amount, then subtracts withholding attributable to regular wages and earlier supplemental payments in that payroll period.
The employer chooses a permitted method. A calculator comparison helps explain a pay statement but does not give the employee the right to select the payroll method.
The $1 Million Supplemental-Wage Threshold
When current and prior calendar-year supplemental wages exceed $1,000,000, the portion above the threshold is subject to mandatory 37% federal withholding without regard to Form W-4. Supplemental wages from businesses under common control may need to be combined.
The calculator separates the part of the current payment below the threshold from the part above it. Prior supplemental wages are independent from prior Social Security and Medicare wages.
$10,000 Bonus Example
For a separately identified $10,000 bonus in Texas, with the percentage method available and no prior wages, federal withholding is $2,200, employee Social Security is $620, and base Medicare is $145. The amount remaining after those listed federal taxes is $7,035.
Texas has no individual income tax on earned wages in this scope. Local taxes, benefit deductions, garnishments and other payroll adjustments are excluded. In a state with supplemental withholding, PayNumera does not label the federal-only remainder as complete take-home pay until that state method is verified.
Why Your Bonus Paycheck May Differ
A pay statement can differ because of the employer’s permitted method, prior supplemental payments in the same payroll period, year-to-date wage histories, Form W-4 settings, state or local withholding, deductions, garnishments, or payroll rounding.
Use employer-specific Social Security and Medicare histories. The Social Security wage base is per employer, while Additional Medicare withholding starts after one employer pays more than $200,000 in Medicare wages.
Frequently Asked Questions
Are bonuses taxed at 22%?
The 22% figure is an optional federal withholding rate for eligible separately identified supplemental wages. It is not the employee’s final tax rate, and the aggregate method may be used instead.
When is the aggregate method required?
It applies when regular and bonus wages are combined without separately identifying the amounts. For a separately identified payment, it is also required when federal income tax was not withheld from regular wages in the current or immediately preceding calendar year.
What happens after $1 million of bonuses?
The portion of calendar-year supplemental wages above $1,000,000 is subject to mandatory federal withholding at 37% for 2026, without regard to Form W-4.
Do Social Security and Medicare apply to bonuses?
Generally yes. Supplemental wages are subject to Social Security and Medicare taxes. The Social Security wage base and the employer Additional Medicare withholding threshold can change the amount withheld from a particular bonus.
Does this calculator include state bonus tax?
It shows zero state wage-income withholding only for states verified to impose no individual tax on earned wages in this scope. Other states show state supplemental withholding as not calculated.
Can I choose how my employer withholds my bonus?
The employer chooses among methods allowed by federal rules. The comparison is educational and does not change payroll instructions.
Methodology and Official Sources
Updated September 15, 2026. Examples are illustrative. Financial results are estimates within the stated scope; state calculation coverage and exclusions appear with the results. Report a discrepancy through the project's issue tracker, without posting personal financial information.
Related Calculators
Paycheck · Bonus Tax · W-4 Withholding · Income Tax · Payroll · Hourly Paycheck · Salary · Salary to Hourly · Hourly to Salary · Overtime