Bonus Tax Calculator 2026 – Estimate Your Bonus Take-Home Pay
Getting a bonus is exciting, but your take-home bonus is almost always lower than the gross amount. Use this free bonus tax calculator to estimate how much of your bonus you keep after federal withholding, Social Security, Medicare, and state tax. This tool helps answer common questions like “why is my bonus taxed so high?” and “how much tax is taken out of a $5,000 or $10,000 bonus?”
Your Estimated Bonus Paycheck
Gross Bonus: | Total Taxes:
How Are Bonuses Taxed?
The IRS treats bonuses as supplemental wages. They are still considered ordinary income, but employers often withhold taxes from a bonus differently than from a normal paycheck. That difference in withholding is why bonuses often feel “over-taxed.”
1. Percentage Method
When a bonus is paid separately from regular wages, many employers use the percentage method. For bonuses under $1 million, the standard federal withholding rate is often 22%. This is the method used by many payroll systems and is the basis for the estimate on this page.
2. Aggregate Method
If your employer combines your bonus with your regular paycheck, payroll may use the aggregate method. In that case, the total paycheck can look large enough to push withholding into a higher bracket for that pay period, even though your final annual tax bill is based on your full-year income.
Important: withholding is not always the same as final tax. If too much tax is withheld from your bonus paycheck, you may recover part of it when you file your annual tax return.
What Taxes Come Out of a Bonus?
- Federal withholding: often 22% under the supplemental wage percentage method.
- Social Security: 6.2% unless you have already reached the annual wage base.
- Medicare: 1.45% on bonus wages, plus 0.9% additional Medicare for high earners above the threshold.
- State income tax: varies by state, and may be 0% in states like Texas or Florida.
Example Bonus Tax Estimates
The examples below are rough planning examples for a worker who has not yet exceeded the Social Security wage base and lives in a moderate-tax state. Actual results depend on income, location, and payroll handling.
| Gross Bonus | Federal (22%) | FICA (7.65%) | State Tax (Example) | Estimated Net Bonus |
|---|---|---|---|---|
| $2,500 | $550 | $191 | $100 | $1,659 |
| $5,000 | $1,100 | $383 | $200 | $3,317 |
| $10,000 | $2,200 | $765 | $400 | $6,635 |
| $20,000 | $4,400 | $1,530 | $800 | $13,270 |
Why Is My Bonus Taxed So High?
Most employees notice that bonuses feel more heavily taxed than a normal paycheck. In reality, what usually changes is the withholding method, not the permanent tax character of the income. A bonus is still taxed as ordinary income in the long run, but payroll may withhold a larger amount upfront.
Can You Reduce Bonus Taxes?
You usually cannot eliminate bonus taxes, but you may be able to reduce the immediate withholding impact in certain situations:
- Increase 401(k) contributions: some employers allow pre-tax retirement deductions from bonus pay.
- Use HSA contributions: if eligible, HSA payroll deductions may reduce taxable wages.
- Check your annual income position: if too much is withheld overall, your tax return may generate a refund.
- Plan timing carefully: year-end bonuses can interact with wage base limits and annual income thresholds.
Do States Tax Bonuses Differently?
Yes. Some states use flat supplemental rates, others use ordinary wage withholding rules, and some states do not tax wages at all. If you live in Texas, Florida, Nevada, Tennessee, Washington, or Alaska, your bonus may avoid state wage tax entirely. In higher-tax states like California, New York, and Oregon, state withholding on bonuses can materially reduce take-home pay.
Frequently Asked Questions
Why is my bonus taxed so high?
Bonuses often look heavily taxed because payroll commonly withholds federal taxes at a flat 22% supplemental wage rate for many bonuses. This is a withholding method, not necessarily your final tax rate after filing.
Is a bonus taxed differently than salary?
In the long run, a bonus is generally taxed as ordinary income, like salary. What changes is often the withholding method used on the paycheck.
What is the federal withholding rate on a bonus in 2026?
For many employees, the federal supplemental wage withholding rate is 22% for bonuses under $1 million when the percentage method is used.
Do bonuses have Social Security and Medicare taxes?
Yes. Bonuses are generally subject to Social Security and Medicare taxes, just like regular wages, unless you have already exceeded the Social Security wage base for the year.
Can I lower the taxes withheld from my bonus?
You may be able to reduce the immediate withholding impact by increasing pre-tax deductions such as 401(k) or HSA contributions during the bonus pay period, depending on your employer's payroll rules.