What is the bonus tax rate in 2026?

Employers withhold a flat 22% federal rate on supplemental wages (bonuses, commissions) up to $1 million, and 37% on any portion above $1 million. This is withholding, not your final tax rate — your bonus is ultimately taxed at your ordinary marginal rate when you file, so you may get part of the 22% back as a refund (or owe more if you are in a higher bracket).

Is a bonus taxed differently than salary?

Not in the long run. A bonus is ordinary income taxed at the same brackets as your salary. It only looks different because employers use a flat 22% supplemental withholding rate (or the aggregate method) on the paycheck, which often differs from your true marginal rate. FICA (7.65%) and state tax still apply on top, which is why a bonus paycheck can feel like it lost 30–40%.

Why does my bonus look like it's taxed at 40%?

Because of the IRS supplemental flat-rate withholding rule. Employers default to a 22% federal rate on bonuses (37% on amounts over $1M), plus 7.65% FICA, plus your state rate. That stacks to roughly 30-37% withheld — close to 40% in high-tax states. But this is the WITHHOLDING, not the actual tax owed. Your real federal tax on the bonus is your marginal bracket, which is usually 22-32%. The gap shows up as a refund at filing.

What's the formula for real tax on a bonus?

Real federal tax = federal_tax(salary + bonus) − federal_tax(salary alone). This pulls out the bonus's share of the federal bill at your true marginal rate. FICA and state are flat (same withheld and owed), so the gap is almost entirely a federal-withholding-vs-marginal mismatch.

When does the 37% rate apply?

On the cumulative supplemental wages above $1,000,000 in a calendar year. Most workers never see this. For executives or high-end RSU vests that exceed $1M cumulative, the first $1M is withheld at 22%, the rest at 37%. The calculator handles this split automatically when you enter a bonus over $1M.

What if my employer uses the 'aggregate' method instead?

Some employers add the bonus to the next regular paycheck and withhold using the W-4 method (treating the combined gross as if it were your normal pay frequency). This typically over-withholds even more than the 22% supplemental flat — same myth ('I'm taxed at 40%') but a different mechanism. The real tax is identical; only the withholding paperwork differs.

Is FICA really 7.65% on the whole bonus?

Yes, until you exceed the Social Security wage base ($181,000 in 2026). After that, only the 1.45% Medicare portion applies (plus 0.9% Additional Medicare above $200k single / $250k MFJ). The calculator assumes you're below the SS cap — for high earners receiving a bonus AFTER hitting $181k YTD wages, your FICA on the bonus is just 1.45% (Medicare-only) and your withholding is correspondingly lower.

What if my marginal rate exceeds 22%?

Then the 22% supplemental flat actually UNDER-withholds, and you'll owe more at filing. Common for workers in the 24%, 32%, or 35% brackets (single filers above ~$103k, ~$202k, or ~$257k taxable income for 2026). The calculator detects this case and surfaces a yellow warning verdict — set aside the gap before April so you're not surprised.

Does this apply to RSU vests?

Yes, RSUs are taxed as supplemental wages on the vest date. The same 22% federal flat rule applies (or 37% above $1M cumulative). High earners with large RSU vests typically see significant under-withholding because their marginal rate is well above 22%. The dedicated RSU Tax Calculator (also Phase I.2) handles this case in more depth.

Will the refund be exactly what the calculator shows?

Approximately, yes — the federal portion is exact (uses 2026 brackets). FICA and state are typically the same withheld and owed, so they net to zero in the delta. The slight variability in your actual refund comes from the rest of your tax return (other deductions, credits, other income sources). Use the delta as a working estimate, not a guaranteed refund amount.

Should I adjust my W-4 instead?

If you receive a large recurring bonus (signing bonus, annual performance bonus, regular RSU vests), it's often worth filing a new W-4 with extra withholding (Step 4c) to smooth the cash flow and avoid surprises. The calculator's 'gap' line tells you the dollar amount per bonus event — divide by remaining pay periods if you want to spread it.

What about state-level supplemental rates?

Many states have their own supplemental rates for bonuses (CA at 10.23%, NY at 11.7%, etc.). The calculator uses your single flat state rate input — for accuracy in a high-supplemental state, set the state rate to your supplemental rate rather than your effective rate. The federal logic is unchanged.

Can I save scenarios for multiple bonus events?

Yes — click Save under the result, name the scenario ("Annual bonus 2026," "Q4 RSU vest," "Year-end bonus") and store in your browser. Up to 5 saves per calculator. Useful for modeling the cumulative withholding gap across multiple bonus events in a year.

Is the supplemental flat rate the same in every year?

It has been 22% since 2018 (Tax Cuts and Jobs Act). The 37% rate above $1M tracks the top federal bracket (also unchanged at 37% since 2018). Both could change with future tax legislation; we'll update the calculator when they do.

Tax & DeductionsFree · No signup · 100K+/month

Bonus Tax Calculator 2026 — See Withholding vs Real Rate + Refund

Enter your salary + bonus + state. The calculator shows the supplemental flat withholding (22% federal) versus your real marginal tax — and tells you whether you'll get money back at filing or owe more.

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Reviewed by CalcBold EditorialLast verified May 4, 2026Methodology

Withheld vs. real — side by side

The two columns show what the employer takes off the bonus check (supplemental flat) versus what you actually owe at filing (marginal). The gap is your refund — or the amount you’ll owe extra.

FilingBase salary ($)Bonus ($)State (%)

Withheld on paystub

Federal supplemental22% supplemental flat	$2,200
FICA (SS + Medicare)6.2% + 1.45% = 7.65%	$765
State	$500
Total withheld	$3,465

Real tax on bonus (marginal)

Federal (marginal)24.0% bracket	$2,366
FICA (same as withheld)	$765
State (same as withheld)	$500
Total real tax	$3,631

Withholding ≈ real tax

−$166

Withholding closely matches real tax — no notable refund or shortfall.

2026 federal brackets — your marginal rate is highlighted

Up to $12,225	10%
$12,225 – $49,700	12%
$49,700 – $105,950	22%	← supplemental flat rate
$105,950 – $202,300	24%	← bonus pushes you here
$202,300 – $256,800	32%

The IRS withholds 22% federal flaton bonuses regardless of your marginal bracket (37% on amounts over $1M). If your marginal rate is below 22%, you over-withhold and get money back. If it’s above 22%, you under-withhold and owe at filing.

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Why Your Bonus Looks Like It Was Taxed at 40%

The most common bonus complaint in America is not about the amount — it is about the taxes. A $10,000 bonus shows up as roughly $6,500 in the bank, and most employees conclude they are being taxed at 35–40%. They are wrong about the rate but right about the size of the haircut. Two distinct things are happening simultaneously, and most paycheck explanations confuse them: withholding (what disappears from the bonus before it deposits) and real tax (what you actually owe the IRS for that income at filing time). These two numbers are almost never equal, and the direction and size of the gap determines whether April brings a refund or a balance due.

The IRS calls bonuses, commissions, overtime pay, back pay, and similar compensation “supplemental wages.” Supplemental wages have a special withholding treatment under IRS Publication 15 (Circular E), Section 7: employers can withhold at a flat 22% federal rate on the first $1 million of supplemental wages in a calendar year, and 37%on the excess above $1 million. That flat 22% is not a tax rate — it is a withholding instruction. The real federal tax on your bonus is your marginal bracket rate on the amount the bonus adds to your taxable income, and for most workers that rate is either below 22% (creating an over-withholding refund) or above 22% (creating a balance due that surprises high earners in April).

The Bonus Tax Formula

Supplemental Wage Withholding (what leaves your paycheck)

Federal withheld = Bonus × 22% (or 37% above $1M cumulative supplemental wages)
Total withheld = Federal withheld + FICA (7.65%) + State flat rate

The 22% flat is an IRS-prescribed withholding shortcut — not the actual tax rate. The employer remits this amount to the IRS on your behalf. FICA (6.2% Social Security + 1.45% Medicare) applies to the bonus in full up to the annual Social Security wage base ($176,100 in 2026 projected). State withholding uses each state’s own supplemental flat rate or the aggregate method.

Source:IRS Publication 15 (Circular E) — Supplemental wages, Section 7· Internal Revenue Service

Real Federal Tax on the Bonus (what you actually owe)

Real federal tax = federal_tax(salary + bonus) − federal_tax(salary alone)
Using 2026 standard deduction: $15,750 (single), $31,500 (married filing jointly)

This marginal-difference method extracts exactly the federal tax attributable to the bonus at your true bracket rate. If the bonus pushes you across a bracket boundary, the portion above the boundary is taxed at the higher rate and the portion below at the lower rate. The IRS settles this gap at annual filing — the 22% flat withholding is just an estimate made in advance.

Source:IRS — Rev. Proc. 2025-22: 2026 tax year inflation adjustments· Internal Revenue Service

The FICA componentis where the withholding and real-tax lines converge: FICA is flat, so the amount withheld on the bonus equals the amount owed — no gap. The Social Security portion (6.2%) applies only up to the annual wage base ($176,100 projected for 2026). If your regular salary already exceeds the wage base, Social Security does not apply to the bonus at all — only the 1.45% Medicare portion does (plus the 0.9% Additional Medicare Tax if total wages exceed $200,000 for single filers or $250,000 for married filing jointly).

Three Worked Examples

Three scenarios representing the three distinct outcomes the calculator surfaces: a roughly-matched case, an over-withheld refund, and the under-withheld balance-due trap that surprises high earners every April.

Example 1

Matched case — $120K salary, $10K bonus, single filer

Filing status: Single
Annual base salary: $120,000
Bonus: $10,000
State rate: 5%

Federal withholding on the bonus at the 22% supplemental flat rate.
22% × $10,000 = $2,200
FICA on the bonus (wage base not yet exceeded).
7.65% × $10,000 = $765
State withholding at 5% flat.
5% × $10,000 = $500
Total withheld from the bonus check.
$2,200 + $765 + $500 = $3,465 withheld   (net bonus: $6,535)
Real federal tax: salary taxable income = $120,000 − $15,750 std deduction = $104,250. Bonus adds $10,000 → taxable = $114,250. Both amounts sit in the 22% bracket. Real federal = 22% × $10,000.
Real federal = $2,200   (marginal rate 22% = flat rate 22%)
Delta: withheld minus real tax.
$3,465 − $3,465 = $0   (no refund, no balance due from bonus)

Zero gap — the supplemental flat withholding happened to match the marginal bracket rate exactly. This is the break-even case; no W-4 adjustment needed.

The 22% bracket (2026) runs from $48,476 to $103,350 for single filers. This taxpayer’s salary lands at $104,250 taxable — just above the 24% threshold, but the bonus itself stays within 22% if the salary is below the 24% bracket floor. Check where your own salary sits in the bracket table to see whether the flat rate will over- or under-collect.

Example 2

Over-withheld — refund for the $60K earner

Filing status: Single
Annual base salary: $60,000
Bonus: $5,000
State rate: 4%

Federal withholding at 22% flat.
22% × $5,000 = $1,100 withheld
Taxable income from salary alone: $60,000 − $15,750 = $44,250. Marginal bracket: 12% (12% bracket runs $11,926–$48,475 for single filers in 2026).
Marginal rate = 12%
Real federal tax on the $5,000 bonus at 12% marginal rate.
12% × $5,000 = $600 real tax
FICA and state — identical withheld vs. owed.
FICA: 7.65% × $5,000 = $382.50   State: 4% × $5,000 = $200
Delta: the IRS withheld more than it is owed.
$1,100 withheld − $600 real = +$500 federal over-withheld

$500 federal refund credit at filing. Total bonus withheld: $1,682.50 ($1,100 federal + $382.50 FICA + $200 state). Real total tax owed on bonus: $1,182.50. Net bonus deposited: $3,317.50; true net after year-end true-up: $3,817.50.

The 22% supplemental flat over-collects from every taxpayer whose marginal bracket is below 22% (the 10% and 12% brackets). This covers a large share of the US workforce — single filers earning under $48,476 taxable income. The refund appears in the annual tax return, not on the bonus paystub itself.

Example 3

Under-withheld — the high-earner April surprise

Filing status: Single
Annual base salary: $220,000
Bonus: $50,000
State rate: 5%

Federal withholding at 22% supplemental flat on full $50,000.
22% × $50,000 = $11,000 withheld
Taxable income from salary alone: $220,000 − $15,750 = $204,250 → sitting in the 32% bracket. Adding $50,000 bonus pushes taxable to $254,250. The 32% bracket for single filers in 2026 runs from ~$103,351 to ~$197,300; the 35% bracket above that. The bonus straddles both 35% and a portion at 37% for amounts over $609,350.
Most of the $50,000 is taxed at 35%
Approximate real federal tax on the bonus using the marginal-difference method: federal tax at $254,250 taxable minus federal tax at $204,250 taxable.
Real federal ≈ $50,000 × 35% = $17,500 (simplified; straddling makes it slightly lower)
Delta: withheld versus real.
$11,000 withheld − ~$17,500 real = −$6,500 under-withheld
Additional Medicare Tax at 0.9% applies to wages above $200,000 (single). Bonus excess over $200K triggers this: $50,000 fully above threshold → $450 additional Medicare on bonus.
Total under-withholding including Medicare: ~−$6,950

Approximately $6,500–$7,000 balance due at filing from the bonus alone. The 22% supplemental flat significantly under-collects for taxpayers in the 32%+ brackets. High earners should set this amount aside in a high-yield savings account before filing.

This is the most common source of “I thought I was fine on taxes but owe thousands” among FAANG employees with large annual performance bonuses or RSU vests. RSU vests are also treated as supplemental wages, compounding the gap if multiple vest events occur in the same calendar year.

How Withholding Rate Compares to Real Tax Rate by Income

The table below summarizes the relationship between the IRS 22% supplemental flat withholding and the real marginal rate for a single filer at various salary levels, using a $10,000 bonus. The “April outcome” column shows the direction of the gap — positive means a refund credit, negative means a balance due.

$10,000 bonus — single filer, 2026 brackets

Supplemental withholding vs. real marginal tax on a $10K bonus

Supplemental withholding vs. real marginal tax on a $10K bonus
Scenario	Marginal bracket	Withheld federal	Real federal tax
$35K salary (10% bracket)	22% → $2,200	10% → $1,000	+$1,200 refund credit
$55K salary (12% bracket)	22% → $2,200	12% → $1,200	+$1,000 refund credit
$120K salary (22% bracket)Recommended	22% → $2,200	22% → $2,200	$0 (balanced)
$200K salary (32% bracket)	22% → $2,200	32% → $3,200	−$1,000 balance due
$400K salary (35% bracket)	22% → $2,200	35% → $3,500	−$1,300 balance due

FICA (7.65%) and state tax are not shown here; they are the same on both sides of the equation and do not affect the gap. The ‘refund credit’ is not a separate check — it reduces total tax owed at filing and may contribute to an overall refund depending on other income and withholding.

When the 37% Rate Applies

The IRS switches the supplemental withholding rate from 22% to 37% when cumulative supplemental wages to an employee exceed $1,000,000 in a single calendar year. This threshold is cumulative, not per-event. If you received a $600,000 bonus in Q1 and a $500,000 RSU vest in Q4, the first $400,000 of the Q4 vest is withheld at 22% (filling the remaining space below $1M) and the final $100,000 is withheld at 37%.

Employer payroll systems typically track cumulative supplemental wages via the W-2 YTD codes. If you receive multiple large supplemental payments in a year — annual bonus plus RSU vest plus sign-on bonus, for example — check your most recent paystub YTD line for supplemental wages to see whether you are approaching or have crossed the $1M threshold. The 37% withholding above the threshold usually produces over-withholding for everyone except the top income bracket.

The Aggregate Method vs. the Supplemental Flat Method

The 22% supplemental flat rate is one of two IRS-approved methods for withholding on a bonus. The other is the aggregate method: the employer adds the bonus to a regular paycheck, computes withholding on the combined gross as if it were a normal pay period, then subtracts the regular withholding. This tends to produce higher withholding than the 22% flat, because a single-period paycheck inflated by a large bonus implies a very high annualized income to the IRS withholding tables.

The aggregate method is more common when the employer pays the bonus in the same paycheck as regular wages. The supplemental flat method is more common when the bonus is issued as a separate, standalone payment. The real tax owed is identical either way; only the withholding — and therefore the refund or balance at filing — differs between the two methods. If your bonus check shows an unusually large federal withholding that exceeds 30%, your employer likely used the aggregate method.

How to Use This Calculator

Select your filing status (single, married filing jointly, married filing separately, or head of household). This determines the 2026 federal bracket thresholds used to compute your real marginal tax.
Enter your annual base salary— your regular wages before the bonus. This sets where you sit in the bracket table before the bonus is added.
Enter the bonus amount. Use the gross pre-tax figure from your offer letter or paystub, not the net deposit.
Optionally enter a state income tax rate. Nine states have no income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). Other state rates range from roughly 2% (North Dakota) to 13.3% (California top bracket). Most states follow the federal supplemental flat approach for withholding — check your state’s revenue department for the exact rate.
Read the side-by-side panel: left column is what was withheld (flat 22%), right column is what is really owed (marginal bracket). The delta below tells you the April direction — green for a refund credit, yellow for a balance due.

Should You Adjust Your W-4 After Running This Calculator?

For a one-time bonus (signing bonus, spot bonus), a W-4 adjustment is rarely worth the paperwork. Simply set aside the under-withheld amount in a high-yield savings account and settle at filing.

For a recurring bonus or RSU vest stream, the gap compounds annually. If the calculator shows a consistent negative delta (you owe more at filing than was withheld), use IRS Form W-4, Step 4(c) — “Extra withholding” — to add a flat dollar amount per regular pay period. Divide the expected annual gap by remaining pay periods in the year to calibrate the right per-period adjustment.

If the delta is positive (consistent over-withholding), use Step 4(b) to claim additional deductions or reduce the withholding. Some employees deliberately allow over-withholding as forced savings — a legitimate choice, as long as you understand the opportunity cost of an interest-free loan to the government.

Background

A Brief History of Supplemental Wage Withholding in the US

The current supplemental wage withholding system — with its flat 22% rate and $1 million threshold — is the product of a long legislative evolution that traces back to the Revenue Act of 1942. That law introduced income tax withholding on wages as a wartime revenue mechanism, applied as a payroll deduction rather than a lump annual payment. Before 1943, most Americans settled their entire annual income tax bill through a single payment at filing — a system that worked tolerably when only a small fraction of the population earned enough to owe federal income tax, but broke down when wartime deficits required taxing middle incomes aggressively ^[1].

The concept of a flat supplemental withholding rate separate from regular wage withholding was formalized in IRS guidance that evolved through the mid-20th century. The basic rationale was administrative convenience: calculating the precise marginal tax impact of each bonus payment would require real-time knowledge of an employee’s year-to-date income, filing status, and deductions — information employers did not have in a practical payroll context. A flat rate approximated the average marginal bracket for most wage earners and was easy to apply. The modern 22% flat rate is itself a product of the Tax Cuts and Jobs Act of 2017 (TCJA), which compressed and restructured the bracket system. Before 2018, the supplemental flat rate was 25% ^[2].

The $1 million threshold for the 37% elevated rate was introduced in the Omnibus Budget Reconciliation Act of 1993 and has been periodically adjusted. The distinction between withholding and actual tax liability — the gap this calculator measures — exists because Congress designed withholding as a pre-payment estimation mechanism, not a final settlement. The formal annual reconciliation happens at filing through Form 1040, where the IRS compares actual tax owed against total withholding and issues a refund or assesses a balance due accordingly. This system depends entirely on employees understanding that paystub withholding is an estimate — a fact that many discover only when confronted with a large April balance due from an unexpectedly large bonus ^[3].

IRS — Historical overview of the income tax withholding system · Internal Revenue Service · 1942
IRS Publication 15 (Circular E) — Employer’s Tax Guide, Section 7 · Internal Revenue Service · 2026
IRS — Tax Withholding Estimator and W-4 instructions · Internal Revenue Service

RSUs, Commissions, and Other Supplemental Wages

The bonus tax mechanics described above apply to all IRS-classified supplemental wages, not just cash bonuses. The most common supplemental wage categories that affect knowledge workers:

Restricted Stock Units (RSUs): At vesting, RSUs are ordinary income equal to the fair market value of the shares on the vest date. The employer must withhold at 22% supplemental flat (or 37% above $1M). High-bracket earners with large RSU vests are routinely under-withheld for the same reason as the Example 3 scenario above. The shares themselves may also be subject to capital gains tax when sold if their value changes between vest date and sale date.
Signing bonuses: Treated identically to performance bonuses for withholding purposes. A $50,000 signing bonus at a company with a high-bracket employee will produce a ~$6,500 federal under-withholding gap at year-end. Many employees discover this only when they file their first-year return.
Sales commissions: If paid separately from regular wages, commissions are supplemental wages subject to the 22% flat. If included in the same check as regular wages, the aggregate method typically applies.
Overtime pay: Mandatory overtime pay for non-exempt workers is supplemental wages if paid separately; aggregate method if combined with regular wages. In practice, most payroll systems combine regular and overtime wages in one paycheck.

Bonus Tax Terminology — Quick Reference

Quick reference

Bonus tax glossary

Supplemental Wages IRS term for compensation paid separately from regular wages: bonuses, commissions, overtime, back pay, RSU vests, signing bonuses.: Under IRS Publication 15, Section 7, supplemental wages have their own withholding rules separate from regular payroll. The 22% / 37% flat rate applies when the employer identifies and pays them separately. If mixed into a regular paycheck, the aggregate method applies instead.
Source: IRS Publication 15 — Supplemental wages
Supplemental Flat Rate The IRS-prescribed 22% federal withholding rate on supplemental wages up to $1M in a calendar year (37% on the excess).: This is a withholding instruction, not a tax rate. The flat rate exists for administrative convenience — it approximates the average bracket for mid-level earners. It over-collects from workers in the 10% and 12% brackets and under-collects from workers in the 32%, 35%, and 37% brackets.
Marginal Tax Rate The federal income tax rate that applies to the last dollar of your income — the rate at which the bonus is actually taxed.: For 2026 single filers, marginal brackets are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The bonus is taxed at your marginal rate on the increment it adds to taxable income — if the bonus pushes you across a bracket boundary, the straddling portion is split proportionally. This is the number the calculator uses as ‘real tax.’
Source: IRS Rev. Proc. 2025-22 — 2026 inflation adjustments
FICA Federal Insurance Contributions Act payroll tax: 6.2% Social Security + 1.45% Medicare = 7.65% combined employee share.: FICA is flat-rate and applies identically to bonuses and regular wages. The Social Security portion (6.2%) is subject to an annual wage base cap ($176,100 projected for 2026). If your regular salary already exceeds the wage base, the bonus is subject only to Medicare (1.45%) and potentially the 0.9% Additional Medicare Tax if total wages exceed $200,000 (single) or $250,000 (married filing jointly).
Source: SSA — Social Security contribution and benefit base
Additional Medicare Tax (AMT 0.9%) An extra 0.9% Medicare tax on wages above $200,000 (single) or $250,000 (married filing jointly). Withholding starts after the employer pays over $200K to the employee.: Introduced by the Affordable Care Act, the 0.9% Additional Medicare Tax applies to the combined employee share of Medicare wages above the thresholds. Employers must withhold it once wages cross $200,000 for the calendar year. Unlike the regular 1.45% Medicare tax, there is no employer match for the 0.9% portion.
Source: IRS — Questions and answers for the Additional Medicare Tax
Aggregate Method A bonus withholding method where the employer adds the bonus to a regular paycheck and withholds on the combined amount as if it were a single pay period.: The aggregate method typically over-withholds more than the 22% flat because the inflated single-period gross implies a very high annualized income to the IRS withholding tables. It is more common when bonuses are paid in the same check as regular wages. Both methods produce the same real tax owed at filing — only the timing of the withholding differs.
W-4 Step 4(c) The section of IRS Form W-4 that allows employees to request additional flat-dollar withholding per pay period beyond what the withholding tables produce.: Step 4(c) is the standard tool for compensating for chronic bonus under-withholding. Divide the expected annual gap by remaining pay periods, enter that figure in Step 4(c), and submit the updated W-4 to HR. The IRS recommends reviewing and potentially updating W-4 whenever income or life circumstances change significantly.
Source: IRS Form W-4 and instructions
Standard Deduction (2026) The baseline income deduction applied before computing federal tax: $15,750 (single), $31,500 (married filing jointly), projected for 2026.: The standard deduction reduces taxable income dollar-for-dollar. Both the regular withholding tables and this calculator use the standard deduction as the baseline. If you itemize (mortgage interest, charitable deductions, state and local taxes), your actual taxable income will be lower, making the real tax on the bonus slightly less than the calculator shows. The standard deduction amount adjusts annually for inflation under the TCJA.
Source: IRS Rev. Proc. 2025-22 — 2026 standard deduction

When This Calculator Decides For You

Bonus tax math is almost never purely academic — the output maps to a specific financial decision. Four of the most common:

Whether to save or spend the bonus before filing.If the delta is negative (under-withheld), the calculator tells you exactly how much of the net deposit is on loan from the IRS. Set that exact amount aside before spending the remainder. Treating the full net deposit as spendable income is the most common cause of an April “surprise.”
Whether to adjust your W-4 this year. If you receive a recurring annual bonus and the gap is $1,500 or more, a Step 4(c) adjustment prevents the problem from compounding annually. The quarterly estimated tax calculator can help model the correct quarterly underpayment safe-harbor amount if you prefer to pay estimated taxes rather than adjust withholding.
Deciding whether to defer the bonus.If a year-end bonus pushes you over a bracket threshold in December, and your employer allows you to defer it into January, the deferred bonus may be taxed at a lower effective rate if January income starts fresh in a lower bracket. This is a YMYL decision — run the numbers with a CPA before acting.
RSU tax planning.For employees with annual RSU vests above $50,000, the chronic under-withholding gap can accumulate to $10,000–$30,000+ over a career without deliberate management. Run this calculator on each vest event and set up a dedicated “tax reserve” account funded by the gap amount immediately at vest.

Related Tools

Once you know the real tax on your bonus, three calculators complete the planning picture. The raise impact calculatorshows what a permanent salary increase nets after marginal tax — useful for comparing whether a raise or a one-time bonus delivers more lifetime after-tax compensation. The take-home pay calculatormodels the full year’s net income including the bonus as part of total annual wages. The quarterly estimated tax calculator is essential for workers with both W-2 income and 1099 freelance income, where bonus under-withholding stacks with self-employment tax to create large underpayment penalties.

Frequently Asked Questions

The most common questions we get about this calculator — each answer is kept under 60 words so you can scan.

What is the bonus tax rate in 2026?
Employers withhold a flat 22% federal rate on supplemental wages (bonuses, commissions) up to $1 million, and 37% on any portion above $1 million. This is withholding, not your final tax rate — your bonus is ultimately taxed at your ordinary marginal rate when you file, so you may get part of the 22% back as a refund (or owe more if you are in a higher bracket).
Is a bonus taxed differently than salary?
Not in the long run. A bonus is ordinary income taxed at the same brackets as your salary. It only looks different because employers use a flat 22% supplemental withholding rate (or the aggregate method) on the paycheck, which often differs from your true marginal rate. FICA (7.65%) and state tax still apply on top, which is why a bonus paycheck can feel like it lost 30–40%.
Why does my bonus look like it's taxed at 40%?
Because of the IRS supplemental flat-rate withholding rule. Employers default to a 22% federal rate on bonuses (37% on amounts over $1M), plus 7.65% FICA, plus your state rate. That stacks to roughly 30-37% withheld — close to 40% in high-tax states. But this is the WITHHOLDING, not the actual tax owed. Your real federal tax on the bonus is your marginal bracket, which is usually 22-32%. The gap shows up as a refund at filing.
What's the formula for real tax on a bonus?
Real federal tax = federal_tax(salary + bonus) − federal_tax(salary alone). This pulls out the bonus's share of the federal bill at your true marginal rate. FICA and state are flat (same withheld and owed), so the gap is almost entirely a federal-withholding-vs-marginal mismatch.
When does the 37% rate apply?
On the cumulative supplemental wages above $1,000,000 in a calendar year. Most workers never see this. For executives or high-end RSU vests that exceed $1M cumulative, the first $1M is withheld at 22%, the rest at 37%. The calculator handles this split automatically when you enter a bonus over $1M.
What if my employer uses the 'aggregate' method instead?
Some employers add the bonus to the next regular paycheck and withhold using the W-4 method (treating the combined gross as if it were your normal pay frequency). This typically over-withholds even more than the 22% supplemental flat — same myth ('I'm taxed at 40%') but a different mechanism. The real tax is identical; only the withholding paperwork differs.
Is FICA really 7.65% on the whole bonus?
Yes, until you exceed the Social Security wage base ($181,000 in 2026). After that, only the 1.45% Medicare portion applies (plus 0.9% Additional Medicare above $200k single / $250k MFJ). The calculator assumes you're below the SS cap — for high earners receiving a bonus AFTER hitting $181k YTD wages, your FICA on the bonus is just 1.45% (Medicare-only) and your withholding is correspondingly lower.
What if my marginal rate exceeds 22%?
Then the 22% supplemental flat actually UNDER-withholds, and you'll owe more at filing. Common for workers in the 24%, 32%, or 35% brackets (single filers above ~$103k, ~$202k, or ~$257k taxable income for 2026). The calculator detects this case and surfaces a yellow warning verdict — set aside the gap before April so you're not surprised.
Does this apply to RSU vests?
Yes, RSUs are taxed as supplemental wages on the vest date. The same 22% federal flat rule applies (or 37% above $1M cumulative). High earners with large RSU vests typically see significant under-withholding because their marginal rate is well above 22%. The dedicated RSU Tax Calculator (also Phase I.2) handles this case in more depth.
Will the refund be exactly what the calculator shows?
Approximately, yes — the federal portion is exact (uses 2026 brackets). FICA and state are typically the same withheld and owed, so they net to zero in the delta. The slight variability in your actual refund comes from the rest of your tax return (other deductions, credits, other income sources). Use the delta as a working estimate, not a guaranteed refund amount.
Should I adjust my W-4 instead?
If you receive a large recurring bonus (signing bonus, annual performance bonus, regular RSU vests), it's often worth filing a new W-4 with extra withholding (Step 4c) to smooth the cash flow and avoid surprises. The calculator's 'gap' line tells you the dollar amount per bonus event — divide by remaining pay periods if you want to spread it.
What about state-level supplemental rates?
Many states have their own supplemental rates for bonuses (CA at 10.23%, NY at 11.7%, etc.). The calculator uses your single flat state rate input — for accuracy in a high-supplemental state, set the state rate to your supplemental rate rather than your effective rate. The federal logic is unchanged.
Can I save scenarios for multiple bonus events?
Yes — click Save under the result, name the scenario ("Annual bonus 2026," "Q4 RSU vest," "Year-end bonus") and store in your browser. Up to 5 saves per calculator. Useful for modeling the cumulative withholding gap across multiple bonus events in a year.
Is the supplemental flat rate the same in every year?
It has been 22% since 2018 (Tax Cuts and Jobs Act). The 37% rate above $1M tracks the top federal bracket (also unchanged at 37% since 2018). Both could change with future tax legislation; we'll update the calculator when they do.