Free Bonus Tax Calculator

Bonuses feel great until you see the tax withholding. The IRS classifies bonuses as 'supplemental wages' — income paid in addition to your regular salary — and your employer can use one of two methods to withhold federal income tax on them. The Percentage Method applies a flat 22% rate (37% on any amount above $1 million). The Aggregate Method adds your bonus to your regular paycheck and runs the total through normal progressive brackets (10%–37%), then subtracts the tax on regular wages alone. This calculator shows you both results side by side.

Here's why the method matters: a $5,000 bonus for a single filer earning $75,000 per year. Under the 22% flat method, federal withholding is $1,100. Under the aggregate method, your employer adds the bonus to one paycheck (say, $2,885 regular + $5,000 = $7,885), annualizes that ($205,010), calculates tax on the total, subtracts tax on regular wages alone, and divides by pay periods. The result could be higher or lower depending on which bracket the bonus income falls into.

The flat 22% rate is a great deal if you're in the 24% bracket or above — you're paying less federal tax on the bonus than on your regular wages. But if you're in the 12% bracket, the aggregate method saves you money because your bonus gets taxed at around 12% instead of a flat 22%. At the 22% bracket, it's roughly a wash. This calculator does the math for both methods so you can see the exact difference for your situation.

Regardless of which method your employer uses for federal income tax, FICA always applies to bonuses: 6.2% for Social Security (up to the $176,100 wage cap in 2026) and 1.45% for Medicare (no cap). If your total income exceeds $200,000, add 0.9% more for the Additional Medicare Tax on wages above that threshold. State income tax also applies to bonuses — and unlike federal tax, there's no flat rate option at the state level.

One common misconception: people think bonuses are 'taxed higher' than regular income. The reality is that withholding on bonuses can be higher than necessary (especially with the 22% flat method for lower-bracket earners), but when you file your tax return, the bonus is just part of your total income and gets the same bracket treatment. If too much was withheld, you get it back as a refund. The key insight: the 22% flat rate is optional for employers, and knowing which method they use helps you understand your pay stub.