Bonus Tax Calculator 2025
How much of your bonus will you actually take home?
2025 brackets (Rev. Proc. 2024-40) + SS wage base $176,100.
As payroll tax specialists, we help employees understand exactly how bonus income is taxed. The truth is bonuses aren't taxed at a higher 'rate' — they're just withheld differently. This calculator shows you both methods so you know what to expect.
Why is my bonus taxed at 22%?
The IRS allows employers to use a flat 22% federal withholding rate on supplemental income like bonuses for simplicity. This isn't a special 'bonus tax rate' — your bonus is taxed as ordinary income. If 22% is higher than your actual marginal rate, you'll get a refund when you file.
- Flat rate method: Employers withhold 22% on supplemental wages up to $1 million for the year
- Aggregate method (employer's choice): the bonus is added to a regular paycheck and withheld as one payment for that pay period
- FICA taxes (7.65%) also apply: 6.2% Social Security + 1.45% Medicare
- Supplemental wages over $1 million in a calendar year (all bonuses combined, including companies under common control) are withheld at 37%
Source:IRS Publication 15-T
"Getting a $5,000 bonus? Before you plan how to spend it, remember: you won't see all $5,000. Between federal withholding and FICA taxes, a typical employee takes home around $3,500. Let's calculate your exact take-home amount."
Every year, around bonus season, the same email lands: 'Why did they take half my bonus?' The short answer is: they didn't tax it at half — they withheld it at 22%, plus FICA, plus state. Withholding isn't the same as your actual tax bill. Most people get a chunk of this back at filing.
Real-world scenario
A $10,000 year-end bonus, 24% marginal bracket
An engineer earning $115,000 gets a $10,000 year-end bonus. Federal withholding: 22% flat = $2,200. Social Security 6.2% = $620. Medicare 1.45% = $145. State (say CA at ~9.3%) = $930. Net to her account: about $6,105. But her actual marginal federal rate is 24% — so the $2,200 withheld is only $200 short of what she truly owes. The 'half my bonus' feeling is mostly withholding theater.
The part most people miss
If your marginal rate is below 22%, the flat method over-withholds and you get money back at filing. If it's above 22% (35%+ bracket), the flat method under-withholds — and you'll owe at filing. High earners with big bonuses should bump W-4 extra withholding in Q4 to avoid a Form 2210 underpayment penalty next April.
Bonus Details
Counts toward the $1 million limit for 22% withholding. Include payments from all businesses under common control (Pub. 15 §7).
Blank assumes the bonus is paid after your full salary for the year. The 0.9% Additional Medicare Tax is withheld once this employer's wages to you pass $200,000 in the year, and Social Security stops at the wage base; paid earlier in the year, those amounts come out of later paychecks instead (Pub. 15).
Method Comparison
$1,100
Federal withholding
$1,100
Tax the bonus adds at your 22.0% marginal rate
Your Take-Home Bonus
$3,518
Key Insights
Effective Tax Rate
29.6% total on bonus
Marginal Bracket
22.0% federal rate
Note: This calculator estimates federal taxes only. State taxes, local taxes, and other deductions will further reduce your take-home amount.
Sources & References
Primary references used for this content
Federal Income Tax Withholding Methods
Withholding tables for employers
View on irs.gov
Business Income
Supplemental wages and bonuses
View on irs.gov
✓2 primary sources; links re-checked on a weekly rotation by the source watcher
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Disclaimer: This calculator provides estimates for educational purposes only. Not tax, legal, or financial advice. Results may vary based on your specific circumstances. Consult a qualified CPA or tax professional for personalized guidance.