US Bonus Tax Calculator (Supplemental Wage Withholding)
Estimate federal withholding (22% flat rate vs. aggregate method), FICA taxes, state supplemental withholding, and your true tax refund or balance owed on Form 1040.
Bonus & Salary Details
Year-end performance bonus, sign-on bonus, sales commissions, or RSU vest.
IRS Standard: 22% statutory flat rate on bonuses paid separately (or 37% over $1M).
Bonuses are NOT permanently taxed at a higher rate. On your annual Form 1040 tax return, bonuses are simply treated as ordinary wage income taxed at your marginal bracket of 22%.
- Increase 401(k) for your bonus paycheck: You can elect to contribute a large portion of your bonus directly to your pre-tax 401(k) or 403(b), shielding it completely from federal and state income taxes up to the annual limit ($23,500).
- Check your payroll method with HR: If you want to avoid heavy over-withholding from the Aggregate method, confirm with HR that your bonus is disbursed as a separate supplemental check subject to the flat 22% rule.
How it works
1
Enter your gross bonus amount and your normal annual base salary.
2
Select the withholding method used by your payroll department (Flat 22% Percentage Method vs. Aggregate Method).
3
Select your state of residence to calculate state supplemental withholding.
4
Optionally allocate a pre-tax 401(k) contribution percentage to shelter bonus income from taxes.
Frequently asked questions
Why is my bonus taxed so heavily in the United States?
The IRS designates bonuses, commissions, and severance as 'supplemental wages'. Most employers use the statutory flat withholding method, taking a mandatory 22% federal income tax (37% on amounts over $1 million), plus 6.2% Social Security, 1.45% Medicare, and state supplemental rates (e.g., 10.23% in California, 11.7% in NYC), causing 35% to 45% of gross bonus pay to vanish on the paystub.
Are bonuses permanently taxed at a higher rate than regular pay?
No. This is a common misconception. While initial payroll withholding on supplemental wages can be aggressive, bonuses are treated identically to regular salary when you file your annual federal return (Form 1040). If your employer withheld more tax than your true marginal bracket requires, you receive 100% of the overpayment back as an IRS tax refund.
How can I reduce the tax taken out of my bonus?
The most effective method is electing to defer a portion or up to 100% of your bonus directly into a traditional pre-tax 401(k) or 403(b) account prior to the bonus payout date. Every dollar contributed reduces your federal and state taxable wage base dollar-for-dollar, up to the annual IRS elective deferral limit ($23,500 in 2025/2026).
Is this tool free?
Yes. The site is supported by ads, so you never pay or need to create an account.
Does it work on mobile?
Yes. The page adapts to your screen and does not require installing any app.