Bonus Tax Calculator 2026 – How Much of Your Bonus You Keep

Q: What is the difference between the flat and aggregate methods?

With the percentage (flat) method, the bonus is paid separately and withheld at 22%. With the aggregate method, the bonus is added to a regular paycheck and withholding is figured as if you earned that combined amount every period, which usually withholds more.

How bonuses are taxed in 2026

The IRS treats bonuses, commissions, retroactive raises and severance as supplemental wages. Your employer can withhold federal tax on them in one of two ways:

1. Percentage (flat-rate) method

If the bonus is paid separately or listed separately from regular wages, the employer can withhold a flat 22%. Supplemental wages over $1 million in a year are withheld at 37%, and this is mandatory.

2. Aggregate method

The bonus is added to your regular paycheck and withholding is calculated on the total, as if you earned that much every pay period. Because annualizing a one-time spike pushes you into higher brackets, this method often over-withholds.

Withholding vs. actual tax

Neither method changes how much tax you owe. Your real tax on a bonus is your marginal rate. If you're in the 12% bracket, 22% withholding takes too much and you'll get the difference back as a refund. If you're in the 24%+ brackets, 22% may not be enough. The calculator shows both numbers so you can plan.

Frequently asked questions

How much tax is taken out of a bonus?

Most employers withhold a flat 22% federal income tax on bonuses (37% on amounts over $1 million), plus 6.2% Social Security, 1.45% Medicare and state tax. In a no-income-tax state you’ll typically keep about 70% of a bonus. In high-tax states, 60–65%.

Are bonuses taxed more than regular pay?

No. Bonuses are taxed at the same rates as your salary. They’re often withheld at a higher rate, either the 22% flat rate or the aggregate method, which can over-withhold. Any excess comes back when you file your return.

What is the difference between the flat and aggregate methods?

With the percentage (flat) method, the bonus is paid separately and withheld at 22%. With the aggregate method, the bonus is added to a regular paycheck and withholding is figured as if you earned that combined amount every period, which usually withholds more.

Can I reduce the tax on my bonus?

Ask if you can direct part of your bonus into your 401(k), which lowers federal and most state income tax. Some employers also let you put bonus money into an HSA. Otherwise, the tax rate is set by your total income for the year.

Do states have a special bonus tax rate?

Many states set a flat supplemental withholding rate. California’s is 10.23% for bonuses (6.6% for other supplemental wages), and New York and others have their own. This calculator estimates state tax at your marginal rate, which is what you’ll actually owe on your return.