Bonus tax calculator
what do you actually keep?
Enter your salary and bonus to see the exact federal, state, and FICA withholding — using the IRS supplemental wage rate, updated for 2026.
Why is my bonus taxed at 22%?
The IRS requires employers to withhold federal tax on bonuses using the “supplemental wage” flat rate of 22% — separate from your normal paycheck. Your actual tax owed at filing may be higher or lower depending on your total annual income and tax bracket.
Common bonus amounts — California · Single
Single filer · California · 2026 tax brackets · base salary $100,000
Frequently asked questions
The IRS Supplemental Withholding Rate
The IRS classifies bonuses as "supplemental wages" — income paid separately from regular salary. For most employees, employers withhold federal income tax on bonuses at a flat 22% rate in 2026. For bonuses exceeding $1,000,000 in a calendar year, the rate jumps to 37%.
This flat rate applies regardless of your regular tax bracket. If your marginal rate is lower than 22%, you may receive a refund when you file your return. If your rate is higher, you may owe additional tax.
State withholding on bonuses varies. Some states apply their own supplemental rate; others use the same method as regular wages.
Withholding vs. Your Actual Tax Liability
The 22% withholding is taken from your bonus paycheck — it is not your final tax bill. Your actual liability depends on your total income for the year, including the bonus.
If the bonus pushes income into a higher bracket, only the portion above the threshold is taxed at the higher rate. The entire bonus is not taxed at your marginal rate — only the slice above the bracket line.
When you file your annual return, over-withheld amounts come back as a refund and under-withheld amounts are owed.
Ways to Keep More of Your Bonus
A few approaches can reduce the tax impact of a large bonus:
- Maximize your 401(k): If you have not hit the 2026 limit ($23,500), directing some of your bonus to a traditional 401(k) reduces taxable income dollar for dollar.
- Contribute to an HSA: If you have a high-deductible health plan, a bonus can fund HSA contributions (2026 limits: $4,300 individual, $8,550 family).
- Timing: Receiving a bonus in January of a new tax year rather than December gives you a full year before the tax is due — useful if you expect a lower-income year ahead.
Frequently Asked Questions
Is my bonus taxed at a higher rate than my regular salary?+
The 22% federal supplemental withholding rate may be higher or lower than your effective rate. High earners (32–37% bracket) will owe more at filing; lower earners may get a refund. The withholding is a down payment — your return settles the difference.
What is the supplemental withholding rate for bonuses in 2026?+
The IRS flat supplemental rate is 22% for bonuses under $1,000,000 and 37% for amounts above $1,000,000 in the same tax year.
Can I reduce the tax on my bonus?+
You can't change the withholding rate, but you can reduce taxable income by contributing bonus funds to a 401(k) or HSA before year-end. Timing a bonus across a tax year boundary can also help in some situations.
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