How bonuses are taxed
A bonus is taxed as ordinary income, the same as your salary. What's different is how your employer withholds from it. The IRS calls bonuses "supplemental wages", and when one is paid separately from your regular pay, most employers withhold a flat 22% for federal income tax, plus Social Security and Medicare as usual. Above $1 million of supplemental wages in a year, the rate on the excess is 37%, whatever your W-4 says.
The flat rate is a shortcut, not your real rate. When you file, the bonus is simply added to your other income and taxed at your brackets, so the 22% can turn out too high (you get some back) or too low (you owe a little more). This calculator shows both sides.
Tax the bonus really adds = tax on (salary + bonus) − tax on salary alone
Worked example
A $10,000 bonus on a $75,000 salary, filing single: $2,200 federal (22%), $620 Social Security and $145 Medicare come out, so the check is $7,035.00. After the $16,100 standard deduction the whole bonus lands in the 22% bracket, so the withholding matches the tax it really adds and nothing changes when you file.
On a $40,000 salary the same bonus falls in the 12% bracket and adds only $1,200 of federal tax, so $1,000 of the withholding comes back as a refund.
In California, 10.23% more is withheld for the state ($1,023) plus $130 of SDI, while the bonus adds $851 of California tax at your brackets: about $172 of that comes back too.
Bonus withholding by state, 2026
Most states with an income tax also set a flat rate for bonuses paid separately. These are the 2026 rates from each state's employer guide.
| State | Bonus withholding | Take-home pay |
|---|---|---|
| California | 10.23% | California paycheck calculator |
| Florida | No income tax | Florida paycheck calculator |
| Georgia | 4.99% | Georgia paycheck calculator |
| Illinois | 4.95% | Illinois paycheck calculator |
| Michigan | 4.25% | Michigan paycheck calculator |
| New York | 11.7% (NYC 4.25%, Yonkers 1.95975%) | New York paycheck calculator |
| North Carolina | 4.09% | North Carolina paycheck calculator |
| Ohio | 2.75% | Ohio paycheck calculator |
| Pennsylvania | 3.07% | Pennsylvania paycheck calculator |
| Texas | No income tax | Texas paycheck calculator |
- California uses 10.23% only for bonuses and stock options paid separately; other supplemental pay, like overtime or commissions, is withheld at 6.6%. A bonus paid together with regular wages is taxed through the normal tables.
- Pennsylvania and Illinois have one flat income tax rate, so a bonus is withheld at that rate like any other pay. Pennsylvania's local earned income tax applies to bonuses too.
- Georgia withheld 5.19% until May 10, 2026, and 4.99% after the new rate took effect, so bonuses paid early in the year got slightly more withheld than the tax now due.
Things to know
- Paid with your regular paycheck? Then your employer may add the bonus to that paycheck and withhold as if you earned that much every payday, which can take noticeably more than 22% for that one check. It all evens out when you file.
- Put some in your 401(k). Many plans take your usual percentage from bonuses too. That money skips income tax now, so the bonus costs less in tax.
- Social Security stops at $184,500 of wages. If your salary plus bonus passes it, only the part below is taxed for Social Security.
- Check your total withholding. If a bonus pushes you into a higher bracket, the flat 22% can leave you owing. The W-4 withholding calculator shows whether you're on track for the year.
Questions people ask
Why is my bonus taxed so much?
It isn't taxed more than salary, but withholding takes a bigger slice up front: 22% federal plus 7.65% for Social Security and Medicare, plus state tax. In California that adds up to about 40% before SDI. Whatever is withheld beyond your real tax comes back as a refund.
Do I get the bonus withholding back?
Only the part that's more than the tax the bonus really adds, which depends on your bracket. In the 10% or 12% bracket you usually get some back; in the 22% bracket it's about even; in the 24% bracket or higher you may owe a little more.
Is it better to take a bonus in December or January?
It changes which year it's taxed in, not the rate itself. January can help if you expect a lower income next year, or if the bonus would push you into a higher bracket or over a phase-out this year.
Sources
- IRS: Publication 15 (2026), Employer's Tax Guide, section 7: supplemental wages (22%, 37% over $1 million)
- IRS: Rev. Proc. 2025-32, 2026 tax rate tables and standard deduction
- Social Security Administration: contribution and benefit base ($184,500 in 2026)
- IRS: Topic 560, Additional Medicare Tax
- California EDD: 2026 Employer's Guide (DE 44), supplemental wages: 10.23% for bonuses and stock options
- Georgia Department of Revenue: 2026 Employer's Tax Guide (4.99% from May 11, 2026)
- Illinois Department of Revenue: 2026 Booklet IL-700-T (4.95%)
- Michigan Department of Treasury: Form 446, 2026 withholding guide (bonuses at 4.25%)
- New York State Department of Taxation and Finance: NYS-50-T-NYS (1/26), supplemental withholding rate 11.70%
- North Carolina Department of Revenue: NC-30 (2026), supplemental wages 4.09%
- Ohio Administrative Code 5703-7-10: withholding on supplemental compensation at the top rate (2.75% for 2026)
- Pennsylvania Department of Revenue: REV-415 employer withholding guide (3.07% on all compensation)
Reviewed October 11, 2026 by The Dollars World team. How we build and check our calculators · Our data and formulas. This is general information, not financial advice.