🎁 Bonus Tax Calculator
Calculate how much of your bonus you'll actually take home after federal, state, and FICA taxes.
Why Use This Calculator?
Supplemental Wage Tax Calculation
Calculate your bonus tax using IRS supplemental wage rules - 22% flat rate for bonuses under $1 million, 37% for amounts over. Includes FICA (7.65%) and state taxes to show actual take-home from your bonus.
Percentage Method vs Aggregate
Compare the flat 22% percentage method (most common) vs aggregate method (adding bonus to regular wages). Understand why your employer chooses one method and how it affects your net bonus amount.
State Tax Impact Analysis
See how state taxes (0-13.3%) reduce your bonus take-home. A $10,000 bonus in California nets $6,370 after all taxes, while Texas nets $6,765 - a $395 difference from state tax alone.
Tax Refund Projection
Bonus withholding often over-withholds (22% flat vs your actual 12-24% marginal rate). Estimate potential refund when filing annual return - especially valuable for lower earners getting big bonuses.
Multiple Bonus Scenarios
Test different bonus amounts to understand withholding. Small bonuses ($1,000-5,000) vs large bonuses ($10,000+) vs million-dollar bonuses (37% rate kicks in) have different effective tax rates.
401k Contribution Strategy
Calculate tax savings from contributing bonus to 401k. A $10,000 bonus contributed entirely saves $2,200-3,700 in federal taxes immediately, plus grows tax-deferred for retirement.
Step-by-Step Guide
Enter Your Bonus Amount
Input the gross bonus amount before any taxes or deductions. This is what your employer tells you you're getting, not what hits your bank account.
Example:
Example: $5,000 year-end bonus, $10,000 signing bonus, $25,000 annual performance bonus
Select Withholding Method
Choose percentage method (22% flat rate, most common) or aggregate method (bonus added to regular paycheck and taxed together). Most employers use percentage method for simplicity.
Example:
Example: Percentage method for $5,000 bonus = $1,100 federal withholding (22%)
Input Your Annual Salary
Enter your base annual salary (excluding this bonus). This helps determine your actual tax bracket and potential refund from over-withholding at tax time.
Example:
Example: $60,000 salary (22% bracket) getting $5,000 bonus over-withheld by $500-700
Add State Tax Information
Select your state to calculate state withholding. Nine states have no income tax (bonus windfall!), while CA/NY/NJ take 5-13% additional. State taxes use flat rate or aggregate method.
Example:
Example: $10,000 bonus in NY = $685 state tax vs TX = $0 state tax
Calculate FICA Taxes
System automatically adds 7.65% FICA (6.2% Social Security + 1.45% Medicare) unless you've already hit $168,600 Social Security wage base. Medicare has no cap and adds 0.9% over $200k.
Example:
Example: $5,000 bonus = $305 Social Security + $73 Medicare = $378 FICA
Consider Pre-Tax Contributions
Option to contribute bonus directly to 401k, HSA, or other pre-tax accounts. This reduces taxable amount and lowers withholding - contributing $5,000 saves $1,100-1,850 in taxes.
Example:
Example: $10,000 bonus → contribute $5,000 to 401k = only $5,000 taxed
Review Federal Withholding
Check the federal tax withheld (typically 22% for bonuses under $1 million). If you're in 10-12% bracket, this over-withholds by $500-1,200 on a $10,000 bonus - you'll get refund.
Example:
Example: $10,000 bonus withholds $2,200 federal, but actual tax may be $1,200-1,800
Calculate State Withholding
Review state tax amount based on your state's supplemental wage rate (often same as top marginal bracket or flat rate). High-tax states take another $500-1,300 on $10,000 bonus.
Example:
Example: CA withholds 10.23% ($1,023 on $10k), while TX withholds $0
Determine Net Bonus Amount
See your actual take-home after all taxes. Expect 63-72% of gross bonus to hit your account. Plan spending/saving based on net amount, not gross.
Example:
Example: $10,000 gross → $6,500-7,200 net after federal/state/FICA taxes
Estimate Tax-Time Refund
Calculate potential refund when filing annual return. If bonus withheld at 22% but your actual bracket is 12-22%, you'll get back $0-1,000 on a $10,000 bonus when you file.
Example:
Example: $50k salary + $10k bonus: withheld $2,200, actual tax $1,400 = $800 refund
Expert Tips & Strategies
Understand 22% vs Your Actual Rate
IRS requires 22% flat withholding on bonuses under $1M, but that's not your actual tax rate. If you're in 10-12% bracket, you over-pay and get refund. In 32-37% bracket, you may owe more at tax time. Calculate actual tax liability based on total annual income.
Contribute to 401k for Immediate Savings
Contributing your entire bonus to 401k saves 22-37% federal plus 7.65% FICA plus state taxes immediately. A $10,000 bonus → 401k saves $2,965-4,465 in taxes. You can contribute up to $23,000 annual limit. Consider traditional 401k over Roth for bonuses.
Watch for Million-Dollar Threshold
Bonuses over $1 million get withheld at 37% (plus FICA and state). If you get a $1.2M bonus, first $1M withholds 37%, remaining $200k also 37%. This withholding may still under-withhold if you're already high earner - plan for potential tax bill.
Time Large Bonuses Strategically
If possible, receive large bonuses in years with lower income (between jobs, sabbatical, maternity leave). A $50,000 bonus in a $150k year adds 32% marginal tax, but same bonus in a $40k year might be only 22% marginal. Discuss timing with employer.
Maximize State Tax Savings
If relocating, time bonus for zero-tax state residence. Establishing residency in TX/FL before receiving $100,000 bonus saves $5,000-13,000 in state taxes. Get legal advice for legitimate residency changes - timing matters for tax purposes.
Don't Confuse Withholding with Actual Tax
Withholding is just an estimate. Your actual tax liability is calculated on Form 1040 based on total income. Bonus withholding at 22% doesn't mean it's taxed at 22% - it's added to your other income and taxed at marginal rates (10-37%).
Use Bonus for Tax-Smart Moves
Beyond 401k, consider: maxing HSA ($4,150 saves $1,222-1,536), backdoor Roth IRA conversion (pay taxes from bonus, not investments), 529 contributions (state tax deduction in some states), or charitable donations (itemize if bonus pushes you over standard deduction).
Plan Quarterly Estimated Taxes
If you're self-employed or get bonuses without withholding, make quarterly estimated tax payments to avoid underpayment penalty (typically 90% of current year's tax or 100% of prior year's tax). Large Q4 bonus may require Q1 estimated payment.
Common Mistakes to Avoid
✓ Better approach: Bonuses aren't taxed at higher rates - they're supplemental income withheld at 22% flat. Your actual tax is calculated on total annual income at normal marginal rates. If in 12% bracket, you'll get refund. If in 35% bracket, you'll owe more. Withholding ≠ actual tax.
✓ Better approach: Planning to spend $10,000 bonus but only receiving $6,500-7,200 after taxes causes budget shortfalls. Always calculate net amount before making spending/saving decisions. Use this calculator before committing to large purchases financed by expected bonus.
✓ Better approach: Not contributing bonus to 401k means losing 22-37% tax savings immediately. A $10,000 bonus contributes $7,000 after taxes, but contributing entire $10,000 pre-tax grows full amount. You can contribute up to $23,000 annual limit - don't waste bonus on taxes unnecessarily.
✓ Better approach: Accepting job offer based on bonus amount without considering state taxes. A $20,000 bonus in CA nets $12,740 after all taxes, while TX nets $13,530 - an $790 difference. Over 10 years of bonuses, that's $7,900+ difference. Factor state taxes into compensation comparison.
✓ Better approach: Getting $20,000 bonus in January but not increasing W-4 allowances causes massive over-withholding rest of year (expecting more bonus income). After one-time bonus, adjust W-4 to reduce withholding on regular wages or receive $3,000-5,000 refund when you file.
✓ Better approach: High earners ($200k single/$250k married) owe extra 0.9% Medicare tax on wages above threshold. A $50,000 bonus pushing you over threshold adds $450 in additional Medicare tax. Total Medicare becomes 2.35% on bonus amount over threshold, not just 1.45%.
✓ Better approach: Some employers use aggregate method (adding bonus to regular pay), causing huge withholding that month. A $10,000 bonus added to $5,000 paycheck looks like $15,000 paycheck, withholding as if you earn $390,000/year. You'll get refund, but causes cash flow issues. Understand your employer's method.
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Frequently Asked Questions
How much tax will I pay on my bonus?
Bonuses are typically taxed at a flat 22% federal rate (37% for bonuses over $1 million) using the percentage method. You also pay state tax and 7.65% FICA tax. Total tax is usually 30-40% depending on your state.
What is the percentage vs. aggregate method?
The percentage method taxes bonuses at a flat 22% federal rate. The aggregate method adds your bonus to a regular paycheck and calculates tax based on that total, which can result in higher or lower withholding depending on your tax bracket.
Will I get a refund if too much tax was withheld?
Yes! Bonus withholding is just an estimate. When you file your tax return, the IRS calculates your actual tax liability based on your total annual income. If too much was withheld from your bonus, youll get a refund.
Can I reduce taxes on my bonus?
Yes, you can reduce taxable income by maximizing 401(k) contributions, contributing to an HSA, making charitable donations, or having your employer split the bonus across multiple pay periods (though withholding rates remain the same).
Why does my bonus tax seem so high?
Bonuses use a simplified withholding method that often overwithhholds. Your bonus isnt actually taxed at a higher rate - its just supplemental income. At tax time, your actual tax is calculated on total income and you may get a refund.
Financial Disclaimer
This calculator is provided for educational and informational purposes only. The results are estimates based on the information you provide and should not be considered as financial, legal, or tax advice.
Actual results may vary based on your specific circumstances, market conditions, and other factors. Always consult with qualified financial, legal, and tax professionals before making any financial decisions.
We make no guarantees about the accuracy, completeness, or reliability of the calculations. Use this tool at your own risk.