What is the bonus tax rate for 2026?
There's no separate bonus tax. Bonuses are ordinary wages on your return. What people call the bonus rate is a withholding rate. IRS Publication 15 sets the optional flat rate at 22% for 2026, rising to a mandatory 37% on supplemental wages above $1,000,000 in a year. Social Security (6.2% up to the wage base of $184,500) and Medicare (1.45%) come out too.
Flat method: bonus × 22% + bonus × 7.65% = amount taken from the bonus| Bonus | Check, flat method | Check, aggregate method | Kept after you file |
|---|---|---|---|
| $1,000 | $704 | $704 | $704 |
| $2,500 | $1,759 | $1,737 | $1,759 |
| $5,000 | $3,518 | $3,446 | $3,518 |
| $10,000 | $7,035 | $6,388 | $7,035 |
| $25,000 | $17,588 | $14,931 | $17,588 |
| $50,000 | $35,175 | $28,768 | $34,911 |
| $100,000 | $70,381 | $56,474 | $69,117 |
How do the flat and aggregate methods work?
With the flat method, your employer withholds 22% of the bonus and ignores your W-4. To use it, your employer must have withheld income tax from your regular pay this year or last year, and must identify the bonus separately.
With the aggregate method, payroll adds the bonus to a regular check and withholds as if you earned that much every pay period. Here's a worked example using Publication 15-T's annual tables. Take a single employee paid $3,000 every two weeks, with a $5,000 bonus. Regular pay annualizes to $78,000, with $320.38 withheld per check. Adding the bonus annualizes to $208,000, with $1,486.69 withheld. The $1,166.31 difference comes out of the bonus, against $1,100 under the flat method.
The employer chooses the method, though the 37% rule above $1 million applies either way. You can ask payroll which one they use, and your pay stub will show the result.
How much tax will I really pay on my bonus?
The tax on your return depends on the bracket the bonus lands in. For a single filer earning $40,000, a $5,000 bonus adds $600 of income tax, so $500 of the flat withholding comes back when you file. At $300,000, a $20,000 bonus adds $7,000, and flat withholding falls $2,600 short.
| Salary | Flat withholding | Income tax it adds | Real rate | Back or owed at tax time |
|---|---|---|---|---|
| $40,000 | $2,200 | $1,200 | 12% | $1,000 back |
| $60,000 | $2,200 | $1,550 | 15.5% | $650 back |
| $85,000 | $2,200 | $2,200 | 22% | $0 |
| $120,000 | $2,200 | $2,364 | 23.6% | $164 owed |
| $200,000 | $2,200 | $2,400 | 24% | $200 owed |
| $300,000 | $2,200 | $3,500 | 35% | $1,300 owed |
| $700,000 | $2,200 | $3,700 | 37% | $1,500 owed |
This is the trap for higher earners. If your top bracket is above 22%, a bonus at the flat rate is under-withheld, so a big bonus can leave you with a bill you didn't plan for. Set aside the difference, or raise your withholding with Step 4(c) of Form W-4.
Bonuses also don't create a higher tax on your other pay. Only the part that crosses into a new bracket pays that bracket's rate, and your other pay keeps its rates.
Children and other deductions don't change the flat withholding, but they can change the tax. If your total tax falls below your total payments, the extra comes back. Also, Social Security stops at the wage base, so the bonus may skip it if your pay is already past $184,500. Paid early in the year, it might still be withheld, with later checks making up for it. To see the whole-year result, use the tax refund calculator.
What about bonuses over $1 million?
The part of your supplemental wages above $1,000,000 in a year must be withheld at 37%, whatever your W-4 says and whichever method your employer uses. A $1,500,000 bonus has $1,000,000 at 22% and $500,000 at 37%, for $405,000. Earlier bonuses in the same year count toward that line, including those from businesses under common control.
How do you gross up a bonus to a target net?
To hand someone $10,000 after withholding, divide by what's left after each rate. Under the flat method, with the full 7.65% payroll tax, that's 1 minus 0.2965, or 0.7035, so the gross is $14,214.64. No gross-up formula works everywhere, because the Social Security line can fall inside the bonus. At $200,000 of salary, past the wage base, the same $10,000 needs only $13,218.77, since no 6.2% applies. It also ignores Additional Medicare Tax above $200,000, which this calculator includes.
Gross bonus = target net ÷ (1 − 0.22 − 0.0765 − state rate)Enter a target amount above. The tool solves for the gross and handles those limits. It can help with a sign-on or relocation payment. A gross-up targets the check, so your year-end tax can still differ.
What about state tax and a 401(k)?
State rules vary, and this calculator lets you enter the rate your state uses. For example, New York's 2026 employer withholding tables list an 11.7% supplemental rate as an option for bonuses paid separately. States with no wage tax don't withhold at all, and your state income tax calculator estimate shows the tax itself.
If your plan allows it, sending part of a bonus to a traditional 401(k) avoids income tax on that part now. On a $10,000 bonus with half deferred, federal withholding falls to $1,100, and Social Security and Medicare stay at $765. The 2026 employee limit is $24,500, counting your regular contributions, before any catch-up. Check your plan, since some don't allow deferrals from bonuses.
Common questions
Why was my bonus taxed so much?
Often it's the aggregate method, which treats your check as if you earned that much every pay period. Add Social Security and Medicare, plus state withholding, and a large share can vanish. Any over-withholding comes back when you file.
Is a bonus taxed at a higher rate than salary?
No. On your return it's all wages. Only the withholding differs. Your total tax for the year doesn't depend on whether the money was called a bonus.
Is the 22% rate the same in every state?
It's the federal rate, so yes. State rules are separate and some states have their own bonus rate.
Can I ask for a different withholding rate on my bonus?
Under the flat method, Publication 15 says no other percentage is allowed. You can change your W-4 to withhold more on later checks, which can make up a shortfall.
Do I get the extra withholding back?
Yes, when you file, if your total payments exceed your total tax for the year. It can reduce a balance due instead of showing up as a refund.
Does this include my dependents?
Enter children under advanced options. They don't change flat withholding, but they can change your real tax on the bonus at lower incomes, when credits phase in or out.
Sources
- Publication 15 (Circular E), Employer’s Tax Guide, 2026 · Internal Revenue Service
- Publication 15-T, Federal Income Tax Withholding Methods, 2026 · Internal Revenue Service
- Form W-4, Employee’s Withholding Certificate, 2026 · Internal Revenue Service
- NYS-50-T-NYS, New York State withholding tables, 2026 · New York State Department of Taxation and Finance