How to Use the Bonus Withholding Tax Calculator
When your employer pays a bonus, the IRS classifies it as a "supplemental wage" and allows a simpler withholding method than your regular paycheck: a flat 22% federal rate on amounts up to $1 million in a calendar year (amounts above that are withheld at 37%). This is different from how your salary is withheld, which follows your W-4 elections and the standard percentage method across tax brackets. This calculator applies that flat 22% rate directly to your bonus amount to estimate your withholding and net bonus.
For example, a $5,000 bonus has $1,100 withheld at the flat 22% federal rate, leaving an estimated net bonus of $3,900. This doesn't include FICA taxes (6.2% Social Security and 1.45% Medicare) or any state supplemental withholding, which are calculated separately and would reduce the net amount further.
Keep in mind that 22% withholding is not necessarily your true tax rate — it's a standardized method for withholding on supplemental pay. If your actual marginal tax bracket is below 22%, you'll likely get some of that back as part of your refund when you file. If it's above 22%, you may owe more at tax time.
Frequently Asked Questions
The IRS treats bonuses as supplemental wages and lets employers withhold a flat 22% federal rate on amounts up to $1 million in a year, regardless of your regular tax bracket. This is a withholding shortcut, not your final tax rate — your actual tax liability is settled when you file your return.
Possibly. If your actual marginal tax rate is lower than 22%, you may have had more withheld than you truly owe, which typically comes back as part of your tax refund when you file. If your marginal rate is higher than 22%, you may owe more at filing time instead.