How it works
The IRS treats a bonus as supplemental wages, and your employer withholds federal income tax from it in one of two ways (IRS Publication 15 (Circular E) (2026)):
- Percentage method (flat rate). When the bonus is paid separately from regular wages, or identified separately, and income tax was withheld from your regular wages, the employer can withhold a flat 22% of the bonus. Supplemental wages above $1,000,000 in the calendar year must be withheld at 37%, whatever your W-4 says.
- Aggregate method. The employer adds the bonus to a regular paycheck (or to the most recent one), works out withholding on the combined amount with the regular tables in IRS Publication 15-T (2026), and subtracts the tax already withheld from the regular pay. Because the tables treat that larger paycheck as if it were your usual pay, this method often withholds a larger share.
Social Security (6.2% up to the $184,500 wage base) and Medicare (1.45%) apply to a bonus the same way they apply to regular pay, and Additional Medicare Tax of 0.9% applies once your wages for the year pass $200,000 (IRS Publication 15 (Circular E) (2026); SSA for the wage base).
State tax on bonuses. Many states have their own supplemental rate; others withhold on a bonus with the regular tables. The calculator uses these 2026 rules:
| State | Bonus withholding used | Source |
|---|---|---|
| California | 10.23% (bonuses); SDI 1.3% | California Franchise Tax Board + EDD (2026) |
| Texas | No state income tax | Texas Comptroller (2026) |
| New York | 11.7%; plus 4.25% in New York City and 1.95975% in Yonkers | New York State Department of Taxation and Finance (NYS-50-T) (2026) |
| Florida | No state income tax | Florida Department of Revenue (2026) |
| Illinois | not included yet | Illinois Department of Revenue (IL-700-T) (2026) |
| North Carolina | not included yet | North Carolina Department of Revenue (NC-30) (2026) |
| New Jersey | withheld with the regular wage chart (no separate rate) | New Jersey Division of Taxation (NJ-WT) (2026) |
| Ohio | not included yet | Ohio Department of Taxation (2026) |
| Georgia | 4.99% | Georgia Department of Revenue (2026) |
| Pennsylvania | 3.07% | Pennsylvania Department of Revenue (2026) |
| Michigan | 4.25% | Michigan Department of Treasury (2026) |
| Virginia | 5.75% | Virginia Department of Taxation (2026) |
More states are being added; the /changelog lists each one.
Worked example
Say you receive a $5,000 bonus on its own payday, are paid $2,000 biweekly, file as single and live in California.
With the percentage method, federal withholding is $1,100.00. Social Security is $310.00 and Medicare is $72.50. California withholding at its supplemental rate is $511.50, and SDI is $65.00. The bonus after tax is $2,941.00, which means 41.2% of the bonus is withheld.
With the aggregate method, the $5,000 is added to the $2,000 paycheck, and federal withholding on the bonus becomes $1,090.54, leaving $2,950.46.
Frequently asked questions
Why is my bonus taxed so high?
Withholding on a bonus is an estimate, not the final tax. The flat federal rate of 22%, or the aggregate method's treatment of a large paycheck as your usual pay, can take more than your actual tax rate for the year; the difference is settled on your annual return (IRS Publication 15 (Circular E) (2026)).
What is the federal tax rate on bonuses in 2026?
Under the percentage method it is a flat 22% of the bonus, and 37% on supplemental wages above $1,000,000 for the year (IRS Publication 15 (Circular E) (2026)). Under the aggregate method, the rate depends on your regular pay and W-4.
Are bonuses taxed differently from regular pay?
The tax owed on a bonus is the same as on any other wages; only the withholding method differs. The bonus is added to your income for the year on your federal return.
Do Social Security and Medicare apply to a bonus?
Yes. A bonus is subject to Social Security at 6.2% up to the $184,500 wage base and Medicare at 1.45% (IRS Publication 15 (Circular E) (2026); SSA).
Which states have their own bonus tax rate?
Several do, including California and New York; others withhold with the regular tables or a flat income tax rate. The table on this page lists the rule the calculator uses for each state it covers, with the source.
Can a 401(k) contribution come out of a bonus?
If your plan allows it, a pre-tax 401(k) contribution from the bonus lowers the amount subject to federal income tax withholding, but not Social Security or Medicare. Enter it in "More deductions" to see the effect.