Plain Paycheck

Tax year 2026 · Federal & state tables · Computed in your browser

Your bonus is withheld at 22%. That’s not your tax rate.

IRS percentage method for supplemental wages · 2026

Withheld, $5,000 bonus
$1,482.50
Actual cost, 12% bracket
$982.50
Actual cost, +CA tax
$1,902.91
Mandatory rate past $1M/yr
37%

The short answer

The IRS withholds bonuses using the "percentage method": a flat 22% federal rate on the first $1,000,000 of supplemental wages an employee receives in a calendar year, 37% mandatory on anything past that, plus ordinary FICA: 6.2% Social Security up to the year's wage base and 1.45% Medicare, with an extra 0.9% above the Additional Medicare threshold. That withholding rate has nothing to do with your marginal tax bracket. It is simply what an employer is required to hold back on the spot.

At filing, the bonus is folded into your regular income and taxed at your real marginal rate. On a $50,000 salary with a $5,000 bonus in Texas, the check withholds $1,482.50 (22% federal plus FICA), but the bonus actually adds only $982.50 to the year's tax bill, because the combined income still sits inside the 12% federal bracket. The $500 difference comes back as a refund. On a $75,000 salary with the same $5,000 bonus in California, federal withholding lines up almost exactly with the actual federal cost (both land in the 22% bracket), but California's own income tax on the bonus, $420.41, was never withheld from the check at all, so that amount is owed at filing.

What the bonus actually keeps.

after federal, state & FICA at filing · single · California · 2026

On the check now
$3,517.50
Actual cost at filing
$1,902.91
Marginal rate
38.1%
Owed at filing
$420.41

What’s withheld from the check: the percentage method

Amount
Bonus, before tax$5,000.00
Federal withholding (22% flat)−$1,100.00
Social Security−$310.00
Medicare−$72.50
Net on the check$3,517.50

This is what a bonus stub actually shows, not what the bonus costs once it is folded into the year’s taxes. See below.

It assumes this bonus is your only supplemental-wage payment this year (that is what decides 22% vs. 37% above) and that your employer withholds using this flat-rate method. The IRS also lets employers instead fold the bonus into a regular paycheck and withhold as if it were one payment, based on your W-4, which can withhold less than shown here for someone in a lower bracket, or more for someone in a higher one. Either way, Social Security and Medicare still apply to the bonus in full.

What the bonus actually costs: the aggregate truth

Amount
Bonus, before tax$5,000.00
Added federal income tax−$1,100.00
Added California income tax−$420.41
FICA−$382.50
Net after actual tax$3,097.09

Withholding took $420.41 less than the bonus actually owes, so the difference is owed at filing.

The math, shown

The IRS gives employers two ways to withhold on a bonus. This calculator models the flat-rate option: 22% federal on the bonus (37% on the slice past $1,000,000 of supplemental wages an employee receives in the calendar year; this assumes the bonus entered here is the only one for the year, since that is what decides which rate applies), plus 6.2% Social Security on whatever part of the bonus falls under the year's wage base, plus 1.45% Medicare on all of it, plus 0.9% more on whatever part of salary-plus-bonus crosses the Additional Medicare threshold for your filing status. An employer may instead fold the bonus into a regular paycheck and withhold as if it were one payment, based on your W-4. That can withhold less than the flat rate for someone in a lower bracket, or more for someone in a higher one. State withholding on bonuses varies too much by state to model as a flat rate, so it is left out of this figure, which is why it can under-count what a bonus actually costs.

Actual cost at filing: federal tax on (salary + bonus) minus federal tax on salary alone, the same subtraction for state tax, plus FICA, which does not change between "withheld" and "actual," since there is no year-end reconciliation for Social Security or Medicare the way there is for income tax. Net-of-bonus is the bonus minus that actual added tax. If withholding took more than the actual cost, the difference comes back as a refund; if it took less, the difference is owed when you file.

Quick answers

Are bonuses taxed at 22%?
No. 22% is the IRS's flat-rate withholding option for supplemental wages (bonuses, commissions, and similar pay) on the first $1,000,000 an employee receives in a calendar year; 37% is mandatory above that, per IRS Publication 15. It's one of two withholding methods the IRS allows: an employer can instead fold the bonus into a regular paycheck and withhold as if it were one payment, based on your W-4, which often withholds less for someone in a lower bracket. Either way, withholding is not your tax rate. At filing, the bonus is added to your other income and taxed at your actual marginal rate, which can land lower or higher than 22% depending on your bracket and state.
Why was my bonus taxed so high?
Because payroll withholds the full 22% federal rate (plus FICA) regardless of your real bracket, if your employer chose the flat-rate method. Someone in the 12% federal bracket sees $1,482.50 held back from a $5,000 bonus but only owes $982.50 once it is filed, a $500 refund. Someone whose combined income sits in a higher bracket, or who owes state tax that is never withheld from the bonus check at all, can owe more instead. The calculator above runs both directions for your own numbers.
Do bonuses count for Social Security and Medicare?
Yes. A bonus is FICA wages exactly like a regular paycheck: 6.2% Social Security up to the year's wage base ($184,500 for 2026, counting salary and bonus together), 1.45% Medicare on all of it, and an extra 0.9% Medicare on the slice of combined income above the Additional Medicare threshold for your filing status. There is no bonus-specific FICA exemption.
How can I reduce tax on a bonus?
Two levers, if your plan and timing allow them: deferring part of the bonus into a traditional 401(k) lowers the income-tax base, though not FICA, since 401(k) deferrals still count as Social Security and Medicare wages. A payroll HSA contribution lowers both income tax and FICA wages at once. Neither changes what an employer withholds from the check itself; both lower what the bonus actually costs at filing.

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