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Take-Home Bonus
$0
Total Withheld
$0
FICA (7.65%)
$0
Calculate your take-home bonus pay after federal supplemental wage withholding, Social Security, and Medicare.
$0
Total Withheld
$0
FICA (7.65%)
$0
Employers typically withhold federal tax on bonuses at a flat supplemental wage rate, plus state tax and standard 7.65% FICA (Social Security and Medicare), rather than using your regular paycheck withholding formula.
Take-Home Bonus = Gross Bonus × (1 − Federal Rate − State Rate − 7.65%)
Bonuses and other supplemental wages are commonly withheld using a flat percentage rate set by the IRS, separate from the graduated withholding formula applied to your regular paycheck. This flat rate is often higher than the withholding rate on your normal paycheck, which is why a bonus can look like it's taxed at a punishing rate when what's actually happening is a different withholding method, not a different tax rate.
The amount withheld from your bonus is just an estimate collected upfront; your actual tax liability for the year is calculated when you file your tax return, based on your total annual income across all sources. If the flat supplemental rate withheld more than your effective tax rate warranted, that difference comes back as part of your refund (or reduces what you owe).
Some employers use the "aggregate method" instead, combining the bonus with your regular paycheck for that pay period and withholding as if that combined amount were your normal pay, then subtracting what was already withheld from your regular wages. This can sometimes result in different withholding than the flat-rate method, though the flat supplemental rate method described here is the more commonly used approach.
Regardless of which federal income tax withholding method is used, bonuses are still subject to the standard 7.65% FICA rate (6.2% Social Security up to the annual wage base, plus 1.45% Medicare), the same as regular wages, since FICA isn't affected by the supplemental wage withholding rules.
Bonuses aren't actually taxed at a higher rate; they're subject to a flat federal withholding rate (a supplemental wage rate) that is often higher than your regular paycheck withholding rate, which can make take-home bonus pay look smaller than expected. Your actual tax liability is determined when you file your return, based on your total annual income.
The IRS allows employers to withhold federal income tax on bonuses and other supplemental wages at a flat percentage rate, separate from your regular paycheck withholding formula. Check current IRS guidance for the exact percentage in effect.
If the flat withholding rate on your bonus is higher than your actual effective tax rate for the year, the excess withheld is reconciled when you file your tax return, either increasing your refund or reducing what you owe.
Check regular paycheck withholding with the Paycheck Calculator, or see your full tax bracket with the Tax Bracket Calculator.
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