How flat withholding on supplemental wages works
Bonuses, commissions, severance, back pay and similar payments are supplemental wages. When they are identified separately from regular pay, an employer may withhold federal income tax at a single flat percentage instead of running the payment through the regular withholding tables. That is why a bonus often looks as if it were taxed at a different rate than the rest of your pay.
Once an employee's supplemental wages for the year pass a statutory threshold, the excess must be withheld at the highest individual rate rather than the ordinary flat rate. The calculator tracks year-to-date supplemental wages so you can see where a payment straddles that line and how much of it falls on each side.
Withholding is not the same as the tax you finally owe. It is a deposit; the return reconciles it, so a large bonus can produce a refund or a balance due depending on your bracket. Rates are shown on a 2026 basis and are editable because the flat rate is tied to statutory rates that change; confirm the current figures in IRS Publication 15.
This is an estimate, not payroll advice. Social Security withholding stops at the annual wage base, state and local withholding is not included, and the aggregate method may apply instead of the flat method. Confirm with your payroll provider or CPA.
Frequently asked questions
No. Only the withholding is calculated differently. At filing, the bonus is ordinary income taxed in your normal brackets, and any over-withholding comes back as a refund.
Once your supplemental wages from one employer exceed the annual threshold for the year. Only the portion above that line is withheld at the higher rate.