Bonus Tax Calculator 2026 (US)
A bonus is supplemental wages. Employers do not have to run it through your Form W-4 the same way as your regular paycheck. IRS Publication 15 section 7 gives them two methods when the bonus is identified separately from regular wages:
- Optional flat 22% (no other percentage allowed) — the method most payroll systems pick
- Aggregate method — add the bonus to regular wages for the period, figure tax on the total with the percentage method, then subtract the tax on the regular wages
Above $1 million of supplemental wages in the calendar year, a mandatory 37% applies to the excess, without regard to Form W-4.
net = bonus − federal withholding − FICA
flat method: federal = 22% × amount under $1M YTD + 37% × excess aggregate: federal = tax(regular + bonus) − tax(regular) FICA = 6.2% Social Security (to $184,500) + 1.45% Medicare (no cap)
Official example (Pub 15 Example 3)
Sharon receives a $1,000 bonus identified separately from her regular wages. The employer elects the flat rate: 22% × $1,000 = $220 federal withholding. FICA still applies on top: $62 Social Security + $14.50 Medicare = $76.50. Net bonus: $703.50.
The $1 million cliff
If you have already been paid $995,000 of supplemental wages this year and this bonus is $25,000, only $5,000 stays at 22% ($1,100). The remaining $20,000 is withheld at 37% ($7,400). Combined federal withholding: $8,500.
This estimate covers separately identified supplemental wages under IRS Pub 15 (2026) section 7 and FICA under 26 U.S.C. § 3101. It excludes state and local taxes, 401(k) deferrals taken from the bonus itself, and nonresident alien adjustments. Educational estimate, not tax advice.
Official sources
- IRS Publication 15 (2026), section 7 — supplemental wages
- IRS Publication 15-T (2026) — percentage method (used by the aggregate method)
- IRS Topic No. 751 — Social Security and Medicare withholding rates
Related tools (United States):
- Take-home paycheck calculator
- Federal income tax withholding calculator
- FICA calculator: Social Security + Medicare
- Overtime pay (FLSA)
Pub 15 section 7 lets the employer elect an optional 22% flat rate (no other percentage allowed) on separately identified supplemental wages, if federal income tax was withheld from your regular wages this year or last. It is withholding, not the final tax bill.
When supplemental wages paid to you in the calendar year exceed $1 million. The excess is withheld at 37% (the highest rate of income tax for the year), without regard to Form W-4.
Yes. Regardless of the method (flat 22% or aggregate), supplemental wages are subject to Social Security (6.2% up to the $184,500 2026 wage base) and Medicare (1.45%, no cap).