Bonus withholding at a glance (single filer, no state tax)
| Bonus | Federal (22%) | FICA (7.65%) | In hand | % kept |
|---|---|---|---|---|
| $1,000 | $220 | $77 | $704 | 70.4% |
| $2,500 | $550 | $191 | $1,759 | 70.4% |
| $5,000 | $1,100 | $383 | $3,518 | 70.4% |
| $10,000 | $2,200 | $765 | $7,035 | 70.4% |
| $25,000 | $5,500 | $1,913 | $17,588 | 70.4% |
| $50,000 | $11,000 | $3,825 | $35,175 | 70.4% |
Assumes year-to-date wages are still under the 2026 Social Security wage base ($184,500). State tax comes on top in the 41 states that tax wages — use the calculator above for your state.
Why bonuses feel over-taxed (they aren't)
Bonuses are "supplemental wages," and most employers withhold federal tax on them at a flat 22% (the percentage method), regardless of your actual bracket. If your real marginal rate is 12%, that 22% withholding is too high — but you get the difference back as a refund when you file. If you earn enough that your marginal rate is 32% or more, 22% withholding is actually too low, and you may owe at filing time.
The key idea: withholding is a prepayment, not the final tax. A bonus is ultimately taxed as ordinary income at your normal marginal rates. The flat 22% only determines how much is taken upfront. For bonuses above $1 million, the mandatory federal withholding rate on the excess is 37%.
Related calculators
See how a bonus fits into your full-year picture with the take-home pay calculator. Paid overtime instead of bonuses? The overtime calculator covers time-and-a-half math and its new tax deduction.
Frequently asked questions
How much tax is taken out of a bonus in 2026?
Most employers use the percentage method: a flat 22% federal withholding on bonuses up to $1 million (37% above), plus 6.2% Social Security (if you're under the $184,500 wage base), 1.45% Medicare, and your state's rate. Total withholding typically runs 29–40% depending on state.
Why was my bonus taxed at 40%?
It wasn't taxed at 40% — it was withheld at a combined rate that can approach 40% once you stack 22% federal, 7.65% FICA, and a high-tax state. Your true tax on the bonus is your ordinary marginal rate; excess withholding returns as a refund when you file.
Can I reduce taxes on my bonus?
The main levers: direct part of the bonus into your 401(k) (reduces taxable income, subject to the annual contribution limit), fund an HSA if eligible, or — if your employer allows — defer the bonus to a year when you expect a lower bracket. You can't avoid FICA on a cash bonus.
Is the 22% bonus rate mandatory?
No. Employers may instead use the aggregate method — adding the bonus to a regular paycheck and withholding per your W-4, which often takes out more upfront. The flat 22% percentage method is simply the most common choice for separately-paid bonuses. Above $1 million, 37% withholding on the excess is mandatory.