A year-end or performance bonus never arrives at full value. This calculator shows exactly how much federal tax, Social Security, Medicare, and state tax come out of a bonus, and how much of it you actually keep.
A bonus is a wage payment, and the tax system treats it like one. That single fact explains most of the shock people feel when a promised $5,000 bonus lands as something closer to $3,300. The money is real, the taxes are real, and the rules governing how much is withheld are decided by the IRS rather than your employer.
What follows matters for planning. If you already earmarked a bonus for a down payment, a tax bill, or a maxed-out retirement contribution, you need the net number in advance. Guessing high is a budgeting error that surfaces in April. This page produces the net number, then explains where each withheld dollar goes and which parts you can legally influence.
The IRS gives employers a choice for supplemental wages, which is the catch-all category that covers bonuses, commissions, and severance.
The flat rate method. Withhold 22% for federal income tax on the first $1 million of supplemental wages in a calendar year, and 37% above that. The bonus is treated as if it sits on top of ordinary income, and the employer skips the bracket math entirely. Most payroll systems default to this because it is simple and fast.
The aggregate method. Add the bonus to the regular paycheck, compute withholding on the combined total using normal brackets and your W-4 elections, then subtract the withholding that would have applied to the salary alone. The difference is what gets taken from the bonus. This approach is more accurate and much more common than people assume, especially at smaller employers without dedicated payroll software.
The two methods produce identical results while your bonus stays inside the 22% bracket. They diverge once the bonus reaches into the 24% bracket or higher, where the flat rate under-withholds. That gap is the single most common reason a taxpayer who "already paid tax on the bonus" still owes money in April.
Variables in plain terms. Gross bonus is the figure on the award letter. Taxable bonus is what remains after any traditional 401(k) deferral, which is the only common deduction that reduces income tax on a bonus. The salary input exists so the calculator can find your marginal bracket and your remaining Social Security wage base room. State rate is a single flat percentage, which is close enough for the nine states with flat taxes and a reasonable approximation for the rest.
Take a $5,000 bonus, a $75,000 salary, single filer, no 401(k) deferral, and a state with a 5% income tax. The bonus sits entirely inside the 22% bracket, so the flat and aggregate methods agree. Federal withholding is $1,100. Social Security takes $310 and Medicare takes $72.50, since the full $80,000 of wages stays below the $184,500 wage base. State tax takes $250.
Total withholding comes to $1,732.50, or 34.65% of the bonus. You keep $3,267.50. For every $1,000 of bonus, roughly $653 reaches your bank account.
| Category | Amount | Share of bonus |
|---|---|---|
| Gross bonus | $5,000.00 | 100% |
| Federal income tax (22% flat) | $1,100.00 | 22.0% |
| Social Security (6.2%) | $310.00 | 6.2% |
| Medicare (1.45%) | $72.50 | 1.45% |
| State income tax (5%) | $250.00 | 5.0% |
| Net bonus | $3,267.50 | 65.35% |
Two of those lines deserve attention. Social Security and Medicare are not income tax, and no deduction, credit, or 401(k) election reduces them. If your salary already exceeded the wage base earlier in the year, the 6.2% line disappears and your bonus arrives about six points richer. The state line, by contrast, is the most variable item in the table, running from zero in nine states to well past 10% in a few.
Most explanations stop at "22 percent." That figure is a withholding rule, not your tax bill. The amount you actually owe on a bonus is the difference between your total tax with the bonus and your total tax without it, and that difference depends entirely on where your income already sits.
The table below holds everything else constant: single filer, standard deduction, $10,000 bonus, 2026 brackets, no state tax, and enough salary paid earlier in the year that the Social Security wage base is already used up. Only the salary changes.
| Salary | Top rate the bonus reaches | Withheld at the 22% rule | Federal tax actually owed | Refund (+) or shortfall (-) |
|---|---|---|---|---|
| $50,000 | 12% | $2,200 | $1,200 | +$1,000 |
| $75,000 | 22% | $2,200 | $2,200 | $0 |
| $100,000 | 22% | $2,200 | $2,200 | $0 |
| $125,000 | 24% | $2,200 | $2,400 | -$200 |
| $150,000 | 24% | $2,200 | $2,400 | -$200 |
| $200,000 | 24% | $2,200 | $2,400 | -$200 |
| $250,000 | 32% | $2,200 | $3,200 | -$1,000 |
| $300,000 | 35% | $2,200 | $3,500 | -$1,300 |
The $50,000 row surprises people. That taxpayer is in the 12 percent bracket on the last dollar of salary, and $10,000 is not enough to push past the 22 percent threshold at $50,400 of taxable income. Payroll withholds $2,200 anyway, so a thousand dollars too much comes out and comes back as a refund. Over-withholding is the most common direction for modest incomes, and it is the reason some people treat a tax refund as a windfall when it is really their own money returned without interest.
The rows above $125,000 run the other way. Withholding is capped at 22 percent while the real rate climbs, so the shortfall grows with income. At $250,000 the bonus lands in the 32 percent bracket and you are $1,000 light. At $300,000 it is $1,300. None of this is a penalty and none of it is avoidable by asking payroll to withhold more accurately, because the flat rate is written into the regulations.
Two things follow. Under-withholding on a bonus can trigger an estimated tax penalty if the shortfall is large enough, so the safe move for high earners is a W-4 adjustment early in the year rather than a surprise in April. Over-withholding is a free loan to the government, and the fix is the same form in the opposite direction.
Raise the salary to $120,000 and the bonus to $20,000. The flat method withholds $4,400 on the bonus. The aggregate method arrives at $4,764, because the first $1,800 of the bonus stays inside the 22% bracket and the remaining $18,200 is taxed at 24%. The $364 difference is not lost money. It is money you still owe, and it surfaces when you file.
The practical fix is a W-4 adjustment rather than a payroll argument. You can add a flat extra withholding amount per pay period, or reduce the number of dependents you claim, to close the gap before April. The take-home pay calculator handles the withholding side of the same question, and it is worth running both numbers together whenever your income changes shape.
Many plans allow deferrals from bonus pay, which changes the arithmetic substantially. Defer 50% of the $5,000 bonus and the taxable bonus falls to $2,500. Federal withholding drops with it, in this case to $550, and state tax falls to $125. Social Security and Medicare still apply to the full $5,000, because deferrals are exempt from income tax and not from payroll tax.
Cash in hand falls to $1,442.50 while $2,500 goes into retirement savings. That is a deliberate trade of liquidity for a tax break and a larger balance, and it only makes sense if you were not depending on the bonus to pay bills. The retirement withdrawal calculator shows what those deferred dollars become later, and the 50/30/20 budget calculator helps decide how much of a bonus belongs in savings versus spending. If you are comparing a bonus-heavy offer against a higher base salary, the hourly to salary converter puts the guaranteed portion on a common footing.
The 22 percent flat rate is a federal rule. States write their own, and most of them never adopted the flat supplemental method. Some tax every dollar at one flat rate, which makes a bonus easy to predict. Graduated states usually run the bonus through their normal withholding tables, and because a bonus is a lump on top of a full year of wages, it almost always lands in the top bracket. The table below covers seven states people ask about most, using rates in effect for the 2026 tax year.
| State | 2026 rate | How a bonus is withheld |
|---|---|---|
| Texas | 0% | No state income tax. The state line on your stub is zero. |
| Indiana | 2.95% flat | Flat rate on all wages, bonuses included. Lowered from 3.00% for 2026. |
| Pennsylvania | 3.07% flat | Flat state rate, but most municipalities and school districts add a local earned income tax on top. |
| Georgia | 5.19% flat | Single flat rate since 2024, reduced from 5.39% by HB 111. |
| Missouri | 4.70% top | The Department of Revenue formula withholds supplemental pay such as bonuses at a flat 4.7%. |
| Virginia | 5.75% top | Graduated brackets from 2% to 5.75%. Employers annualize wages including the bonus, so most bonuses withhold near the top rate. |
| South Carolina | 6.00% top | Graduated brackets topping out at 6%. A bonus stacked on a full salary withholds at or near the top rate. |
On a $5,000 bonus before any 401(k) deferral, after the 22% federal withholding and 7.65% payroll tax, the state line still moves the take-home number by more than $300 between the best and worst case in this table: $3,517.50 with no state tax in Texas versus $3,217.50 in South Carolina. Flat-tax states are the easy ones to estimate. Graduated states are where payroll systems differ, because one employer may tax the bonus alone at the top rate while another spreads it through the annual tables. If your last check looks wrong against these numbers, the fix usually starts with a new state withholding certificate, and the W-4 withholding calculator covers the federal side of that adjustment.
Two caveats worth repeating. City taxes are separate: Kansas City and St. Louis each take 1% of gross wages, Pennsylvania locals take their own earned income tax, and none of those amounts show up in a state rate. And rates here reflect state law as of the 2026 tax year; several states schedule automatic cuts when revenue targets are met, so check your state revenue department if you read this later.
For a typical employee, expect roughly 35 percent to come out. Employers withhold a flat 22 percent federal rate on supplemental wages up to $1 million, plus 6.2 percent Social Security, 1.45 percent Medicare, and state income tax where it applies. On a $5,000 bonus in a state with a 5 percent rate, that is $1,732.50 of withholding and $3,267.50 in your account.
The 22 percent flat rate is a withholding rule, not your tax rate. It comes from the IRS supplemental wage rules and applies to most bonus payments regardless of your bracket. If your marginal rate is 24 percent or higher, your employer withholds less than you will owe, and the shortfall shows up as a smaller refund or a balance due in April.
It can push part of your income into the next bracket, but only the dollars above the threshold are taxed at the higher rate. Brackets are marginal. A $10,000 bonus that crosses the 22 to 24 percent line does not reprice your salary, it just taxes the top slice of the bonus at 24 percent instead of 22.
Often yes, if your plan allows deferrals from bonus pay and you still have room under the annual limit. A traditional 401(k) deferral removes the money from federal and state income tax, but not from Social Security and Medicare tax. Deferring half of a $5,000 bonus in the example above drops the cash you receive to $1,442.50 while $2,500 goes into your retirement account.
Yes. Bonuses are wages, so 6.2 percent Social Security and 1.45 percent Medicare apply, up to the Social Security wage base of $184,500. Earners above $200,000 single or $250,000 married also pay the 0.9 percent Additional Medicare Tax on the excess.
Common causes are local city or county tax, an employer that uses the aggregate method instead of the flat rate, a larger 401(k) deferral than you assumed, garnishments, or imputed income from other benefits on the same check. Compare the pay stub line by line against the breakdown here before assuming an error.
All calculation logic on this page is implemented from the primary documents below. Each one is listed with the figure it supplies, so any rate or threshold in the result can be traced back to its published source.
Current-year brackets and withholding rules, with the source named.