Paychecks & taxes
Bonus Tax Calculator
Built and maintained by Chandranshu Kumar · Figures from the IRS, SSA, BLS and Freddie Mac
Why a bonus looks so heavily taxed
Your regular paycheck is withheld based on your yearly income, which spreads the low brackets across the whole year. A bonus gets a flat 22% instead, so the bite looks bigger in the moment. Nothing is actually taxed at a special bonus rate. When you file your return, the bonus is just income like any other, and if 22% was too much, the difference comes back as a refund. If you are a high earner, 22% can be too little, and you may owe a bit more.
Federal supplemental withholding is 22% on bonuses under $1 million. This is an estimate of withholding, not your final tax, and it is not tax advice.
How the bonus withholding is worked out
Bonuses under $1 million are withheld at the flat 22% federal supplemental rate. On a $10,000 bonus that is $2,200. Payroll tax of 7.65% for Social Security and Medicare adds $765 more.
Where a state taxes income, its share comes off too. Texas does not, so the state line stays $0 in this example. Adding the pieces, about $2,965 is withheld and you keep $7,035.
This is withholding at payout, not the final tax on the bonus. At filing the bonus counts as ordinary income, so if 22% was more than your real rate the difference returns as a refund, and if it was less you owe the gap. The income tax tool shows how ordinary income is taxed, and the methodology lists the rates used.
Common questions
Why is so much taken out of my bonus?
Employers withhold bonuses at a flat 22% federal rate, plus 7.65% payroll tax and any state tax. It is withholding, not your final bill, so an overpayment comes back when you file.
How much of a $10,000 bonus do I keep?
In Texas, about $7,035 after $2,200 federal and $765 payroll tax. A state income tax lowers it further.
Is a bonus taxed at a higher rate than my salary?
No. The 22% is only a withholding rate for the payout. When you file, the bonus is treated as ordinary income at the same brackets as your salary, so nothing is taxed at a special bonus rate.
What happens if a bonus is over $1 million?
The part of a bonus above $1 million in a year is withheld at 37% rather than 22%. Only the amount over the threshold gets the higher rate, and the portion below it stays at 22%.