Bonus Tax Calculator (2026)

Receiving a bonus is exciting, but the amount that hits your bank account can be surprising. Use our bonus paycheck calculator to see your estimated take-home pay after all federal and state taxes are withheld.

How Are Bonuses Taxed?

The IRS considers bonuses "supplemental wages," which means they are taxed as regular income. However, the way taxes are *withheld* from your bonus paycheck can be different from your regular salary, often making it seem like you're paying more tax. There are two common methods employers use:

1. The Percentage Method (Most Common)

If your bonus is paid separately from your regular paycheck, your employer can withhold a flat 22% for federal taxes (for bonuses up to $1 million). This is simple and predictable. Our calculator uses this method for its estimations.

2. The Aggregate Method

If your bonus is included with your regular paycheck, your employer will treat the entire amount as one large paycheck. They will calculate the withholding based on your W-4 and tax tables, which can push you into a higher withholding bracket for that pay period, resulting in a larger deduction.

State and Local Taxes on Bonuses

In addition to federal taxes, your bonus is also subject to state and local income taxes, as well as Social Security and Medicare (FICA). Our calculator includes an estimated withholding for state taxes, which vary significantly. Some states have a flat withholding rate for supplemental pay, while others use their standard income tax brackets.

Frequently Asked Questions

Why is my bonus taxed so high?

It's a common misconception that bonuses are taxed at a higher rate. They are actually taxed as ordinary income. However, they are *withheld* at a higher rate (the 22% flat federal rate) than your regular paychecks, which are calculated based on your W-4 allowances. This can lead to a larger upfront deduction, but it all evens out when you file your annual tax return. If too much was withheld, you'll receive it back as a refund.

Can I lower the taxes on my bonus?

Yes. One of the most effective ways is to increase your pre-tax 401(k) contributions for the pay period you receive your bonus. The money you contribute to your 401(k) is not subject to federal or state income tax, which can significantly reduce the amount withheld.

Are commissions and overtime taxed like bonuses?

Yes, commissions, overtime, and other forms of supplemental pay are generally treated the same as bonuses for tax withholding purposes. Employers can use either the Percentage Method or the Aggregate Method to calculate deductions.