Bonus Tax Calculator 2026

A bonus is not taxed at 22%. It is withheld at 22%

The number everyone knows — «bonuses are taxed at 22%» — describes withholding, not tax. Treasury regulation § 31.3402(g)-1 lets an employer withhold federal income tax on supplemental wages at a flat 22% when the bonus is paid or identified separately from regular wages (37% on anything above $1,000,000 of supplemental wages in the year). The tax you actually owe on the bonus is whatever your marginal rate is, because on your return the bonus is just more wages. On a $5,000 bonus for someone on $85,000, the flat method withholds $1,100 federally while the real federal tax on it is $1,100 at the 22% bracket — so $0 comes back as a refund in April.

That is why the calculator shows two boxes: what you receive now, and what settles at filing. For someone in the 12% bracket the flat rate over-withholds heavily; for someone in the 32% or 35% bracket it under-withholds, and the bill in April is the surprise. On $45,000 with a $2,000 bonus the flat method withholds $440 against a real tax of $240 ($200 back); on $160,000 with $20,000, $4,400 against $4,800 ($400 owed).

The two IRS methods: percentage and aggregate

Employers may withhold on a bonus in one of two ways. The percentage method pays the bonus separately, or identifies it separately on a combined paycheck, and withholds the flat 22% — simple, predictable and the one most large payrolls use. The aggregate method adds the bonus to the regular wages of the same pay period and withholds on the total as if that were your new regular pay, using your W-4 and the normal Publication 15-T tables; the withholding on the bonus is then the difference between that figure and the regular paycheck's. On the $85,000 example, aggregate withholds $1,172 federally against the percentage method's $1,100.

The aggregate method tends to over-withhold more, because the percentage method annualises the combined paycheck — a $5,000 bonus in one biweekly paycheck is treated as if it recurred 26 times, $130,000 a year of bonus. Neither method changes the tax; both are settled on the return. Which one your employer uses is on your stub or in the payroll policy; the calculator lets you pick either and shows the other for comparison. Employers must use the aggregate method when the bonus is not separately identified, and a 37% mandatory flat rate applies to supplemental wages above $1,000,000 in a year regardless of method.

FICA and state tax on a bonus

Whatever the federal method, a bonus is ordinary wages for Social Security and Medicare: 6.2% and 1.45% come out of it unless your wages for the year have already passed the $184,500 Social Security cap, in which case only Medicare applies. On the $5,000 example that is $382.50. A bonus paid late in the year to someone above the cap therefore keeps more than the same bonus paid in January.

State treatment varies: 9 states take nothing, a group publish their own flat supplemental rate — California's 6.6% on bonuses and 10.23% on stock compensation is the best known — and the rest require the aggregate method with the state tables. Every state has its own page below with the state's rule applied.

Filing status and the bonus

The flat percentage method ignores filing status entirely — 22% is 22% — but the real tax does not. The same $5,000 bonus on $85,000 costs $1,100 of federal tax for a single filer and $600 for a married couple filing jointly on that one income, because the joint brackets are wider; the flat withholding of $1,100 is the same for both, so the joint filer's refund on it is $500 against the single filer's $0. Under the aggregate method filing status matters at withholding time too, because the W-4 tables are used.

What counts as supplemental wages

The flat-rate rule applies to supplemental wages, which the IRS defines broadly: bonuses, commissions, overtime pay when paid separately, back pay, severance, accumulated sick leave, awards and prizes, retroactive pay increases, non-deductible moving expense reimbursements, and taxable fringe benefits. Regular wages paid late are not supplemental. Commissions paid with every paycheck are usually treated as regular wages, but a quarterly or annual commission paid separately is supplemental and often withheld at the flat rate; the commission, severance and final-pay pages cover the variants.

Sign-on and retention bonuses are supplemental wages in the year paid, and a clawback in a later year does not reverse the withholding: the repayment is handled on that later year's return, which is one reason to read the clawback clause before signing. Stock compensation — restricted stock vesting, non-qualified option exercises — is supplemental too, and some states apply a higher supplemental rate to it than to a cash bonus.

Can you keep more of a bonus?

You cannot change the tax on it, but you can change when it is paid and where it goes. Directing part of a bonus into a traditional 401(k) removes that part from federal and taxable income at the marginal rate, though not from FICA; on the $5,000 example at the 22% bracket, deferring the whole bonus saves $1,100 of federal tax, provided the year's contributions stay under the $24,500 limit. Many plans allow a separate deferral election for bonuses. An HSA contribution does the same and escapes FICA as well, within the $4,400 / $8,750 limits.

Timing matters at the edges: a bonus paid in January instead of December falls in a different tax year, and a bonus paid after your wages pass the Social Security cap avoids the 6.2%. Asking to be paid under the aggregate method rather than the percentage method changes only the withholding, not the tax — useful if you would rather not lend the government the difference until April.

Reading the bonus on your pay stub

A bonus paid with a regular paycheck appears as its own earnings line — «Bonus», «Supplemental», «Incentive» — and the federal withholding line is larger than usual by the amount withheld on it. If the employer used the percentage method the increase is exactly 22% of the bonus; if it used the aggregate method it is whatever the tables gave, usually more. A bonus paid on a separate check has its own stub with the bonus as the only earnings line. Either way the year-to-date columns include it, and the W-2 will report it inside box 1 wages with no separate identification.

Two things to check: that FICA was taken on it (it should be, unless you are above the cap), and that the state line moved. If the federal withholding on the bonus is more than 22%, the employer used the aggregate method or you have extra withholding on step 4(c) of your W-4, which applies to the bonus paycheck like any other.

Withholding is not your tax

Every federal line on a paycheck is an estimate your employer makes on your behalf, following your W-4 and IRS Publication 15-T; the tax itself is settled once a year on your return. On $85,000 with a $5,000 bonus, the year's withholding comes to $10,970 against a projected tax of $10,970: $0 more than needed, which returns as a refund. Neither a refund nor a bill is a mistake by anyone; it means the W-4 on file did not describe the year exactly, and both are fixed on the W-4, not on the paycheck.

The three places the estimate goes wrong most: a second income in the household without the box in step 2(c) checked, so that both employers apply the full $16,100 standard deduction; a bonus withheld at the flat 22% when the marginal rate is something else; and untaxed side income with nothing on step 4(a). From 2026 there is a fourth, in the taxpayer's favour: the deductions for overtime premium pay and tips reduce the tax but not the withholding. The W-4 fixer turns the gap into the exact lines to change.

Pre-tax deductions: what each one really costs

A $250 contribution to a traditional 401(k) does not cost $250 of take-home. It comes out before federal income tax (and before state tax in most states), so at a 22% marginal rate the paycheck falls by about $195.00. What it does not escape is FICA: the IRS is explicit that elective deferrals are wages for Social Security and Medicare, so the saving is the income tax rate, not the income tax rate plus 7.65%. Health premiums, HSA and FSA contributions through a Section 125 plan are the exception and escape FICA too: the same $250 through an HSA costs about $175.88 of take-home.

After-tax deductions — a Roth 401(k), union dues, garnishments, post-tax life cover — reduce nothing but the deposit, and still belong in the calculation because the deposit is the number that matters. On a $3,269.23 paycheck, the 401(k) calculator draws the cost curve one percent at a time and the pre-tax deductions calculator compares the two kinds side by side.

What changed in 2026

The standard deduction is $16,100 single, $32,200 joint and $24,150 head of household; every bracket threshold moved up with inflation; the Social Security wage base is $184,500; the 401(k) elective limit is $24,500. Each is read from the document that sets it — IRS Revenue Procedure 2025-32, the SSA's contribution and benefit base, IRS Notice 2025-67 — and listed with its source under the calculator.

The bigger change is the set of new federal deductions: qualified overtime premium pay up to $12,500 ($25,000 joint), reported tips up to $25,000, and $6,000 more for each person aged 65 or over, all phasing out above $150,000 of income. None of them changes what an employer withholds, because Publication 15-T does not know about them; they reduce the tax owed at filing, which is why the calculators on this site show them in the «withholding vs what you owe» box rather than on the paycheck. The what changed in 2026 guide keeps the dated list, including state changes.

A worked example: $72,000 in Michigan, paid weekly

Take $72,000 a year in Michigan, paid weekly (52 paychecks), single, standard W-4, no pre-tax deductions. The gross per paycheck is $1,384.62. Federal income tax withholding, from the 2026 Publication 15-T percentage method, takes $134.81. Social Security takes 6.2% of gross, $85.85, and Medicare 1.45%, $20.08. Michigan withholds $54.02 under its flat rate and deductions. The net deposit is $1,089.86, 78.7% of gross; over the year that is $56,673 from $72,000, an effective rate of 21.3% on all taxes together. Every line is reproducible from the documents on the sources page, and the table below lists them in the order they appear on a stub.

Two things on that stub are not obvious from the totals. First, the federal line is withholding, not tax: the tables annualise this paycheck as if all 52 were identical, and the year's actual tax, $7,010, differs from the $7,010 withheld by $0, which becomes a refund in April. Second, Social Security and Medicare are the same fraction of every paycheck of the year, because the salary is under the wage base, and no form can change them; only Section 125 deductions reduce their base. The reading guide walks each line and names what it should equal.

Nearby salaries: what $52,000 to $107,000 leave in Michigan

A raise or a job offer is rarely at the round number on this page, so here is the ladder around it: the same weekly paycheck at 6 salaries from $52,000 to $107,000, single, standard W-4, no deductions. The effective rate climbs from 19.2% to 25.4% across the range because federal income tax is progressive while FICA is flat; each extra $10,000 of salary leaves less than the last, and the pay raise calculator prices any step exactly. The salary after tax pages carry the full range, one page per amount.

Reading the ladder the other way answers the interview question: to take home $10,000 more a year in Michigan takes a raise of roughly $13,407 in gross at this level, because the new dollars are taxed at the marginal rate rather than the average. The state column grows in a straight line, since Michigan charges one rate; the FICA column grows in a straight line until the wage base. The gross-up calculator runs the reverse computation for any net.

The same paycheck under each filing status

Filing status is the one W-4 line everyone fills in, and it moves the federal line more than most people expect. On $72,000 in Michigan, paid weekly, a single filer is withheld $134.81 per paycheck; married filing jointly (one income) $82.31, because the joint table doubles the standard deduction to $32,200 and widens every bracket; head of household $103.62, with its $24,150 deduction and its own brackets. Married filing separately uses the single table. Michigan's own deductions and brackets are the same for joint filers, which is why the state column moves too. Picking «married» with two incomes and skipping step 2 is the commonest cause of an April bill; the W-4 guide covers the choice.

The last column shows why the status matters beyond the paycheck: the year's federal income tax on $72,000 is $7,010 single and $4,280 married filing jointly on one income, a difference of $2,730 that the W-4 status either delivers through the year or holds back for a refund. Head of household is the status most often missed by single parents, who leave $1,622 a year on the single table. FICA is identical in every row, since it has no status.

The whole year on $72,000: withholding, tax due, and the settlement

52 paychecks of $1,384.62 withhold $7,010 of federal income tax over 2026. The tax actually due on the return, with the $16,100 standard deduction and no credits, is $7,010, so the year ends with a refund of about $0 — the gap between the withholding tables' approximation and the exact computation. The marginal rate on the last dollar is 22%; the effective rate on all taxes together is 21.3%. Social Security applies to every paycheck of the year, because $72,000 is under the $184,500 wage base. The 2026 deductions for overtime premium and tips apply at filing to anyone with qualifying pay; they do not change these paychecks. Michigan takes $2,809 for the year, 3.9% of salary.

Refund or bill: what the year settles

Withholding is a prepayment; the return computes the tax and returns or collects the difference. On $72,000 with these settings the year withholds $7,010 against $7,010 due, so the settlement is a refund of about $0. A refund is money lent to the Treasury at no interest for up to sixteen months; a bill is fine up to a point and penalised beyond it. The point is the safe harbour: withholding of at least 90% of this year's tax ($6,309 here) or 100% of last year's (110% above $150,000 of income) avoids the underpayment penalty, which is interest on each quarter's shortfall. These paychecks clear the 90% harbour on their own.

What makes the settlement move: credits the W-4 does not carry (the earned income credit, education credits, the 2026 overtime and tip deductions), which enlarge the refund; a second income, other income, or too many dependents on the form, which produce the bill; a bonus withheld at the flat 22% when the marginal rate is 22%, which over-withholds at this salary; and a change of job or a partial year, which annualises each paycheck wrongly. The W-4 fixer sets the lines that bring the settlement to zero, or to a chosen refund.

What deductions do to this paycheck

Deductions are where the same salary produces different paychecks. A 6% traditional 401(k) contribution — $83.08 per paycheck on $72,000, well under the $24,500 annual limit — reduces federal and state taxable wages but not FICA wages, so it costs $61.27 of take-home rather than its face value. A $150 Section 125 deduction for health premiums or an HSA reduces every base including FICA, and costs $103.57. A Roth contribution of the same 6% comes out after tax and costs the full amount now in exchange for tax-free withdrawals later. The table gives each case for this paycheck; the pre-tax deductions calculator runs any amount and the 401(k) calculator draws the whole curve.

The order matters on the stub as well as in the arithmetic. Section 125 items come off first and reduce the FICA wages line, which is why a health premium lowers the Social Security and Medicare figures by 7.65% of itself; the 401(k) comes off next and reduces federal taxable wages only. Both appear in the W-2: box 1 (federal wages) is gross minus both, boxes 3 and 5 (Social Security and Medicare wages) are gross minus the Section 125 items alone. An employer match, where there is one, is added on top of the contribution and never touches the paycheck; the compare two jobs tool values it.

What each W-4 line does to this paycheck

The federal line is the only tax on the stub that a form can change, and each step of the W-4 moves it by a predictable amount. One qualifying child on step 3 lowers withholding by $42.31 per paycheck — the $2,200 credit spread over 52 paychecks — taking the net to $1,132.17. Checking box 2(c) for a second job raises it by $89.17, because the checkbox table halves the brackets so that each job is withheld as if it earned half the household income. Extra withholding on 4(c) is dollar for dollar. Other income on 4(a) adds the tax on it at the marginal rate; deductions on 4(b) remove it. The table runs each case for $72,000 in Michigan; the W-4 fixer computes the combination that makes the year's withholding equal the year's tax.

None of these lines changes the tax; they change when it is paid. Claiming a child that is not yours on step 3, or deductions you will not take on 4(b), enlarges every paycheck and produces the same amount plus a penalty in April. The lawful levers are the ones you are entitled to — the children you have, the deductions you will itemise, the second income you must account for — and the fixer applies exactly those. A new W-4 takes effect from the next payroll run after your employer receives it, and the year-to-date withholding already taken is not recomputed.

$72,000 in Michigan against nine other states

Federal tax and FICA are the same everywhere; the state line is what moves. On $72,000 paid weekly, the nine states with no wage tax leave $1,143.88 per paycheck; California leaves $1,095.14, $48.74 less, or $2,535 over the year. Flat-rate states sit in between and their rate is the whole story; bracket states depend on the salary. Prices move more than taxes between most of these states, and the state pages carry the BEA price index beside the take-home; the state ranking sorts all 51 for any salary.

Two cautions before reading the table as a moving guide. The state taxes wages where the work is done, with the resident state taxing everything and crediting the work state, so a remote job does not change the column unless you change where you live — and five states apply a «convenience of the employer» rule that keeps taxing remote work done elsewhere. And the no-tax states collect the difference elsewhere: property tax in Texas and New Hampshire, sales tax in Tennessee and Washington. The no-income-tax guide and the local taxes guide cover both.

Common mistakes

Expecting the 22% to be final. It is withholding; the settlement is your marginal rate, 12% to 37% federally. Assuming a bonus is taxed «more» than salary. It is taxed the same; it is withheld differently. Forgetting FICA on the bonus, which is 7.65% unless you are above the cap.

Reading the flat 22% on a bonus as the tax on it. It is withholding; the tax is your marginal rate. Budgeting from the wrong paycheck: biweekly and semi-monthly differ by about 7.7%. Claiming the same child on two W-4s, which under-withholds the household by the credit. Assuming a raise can push you into a bracket that leaves you worse off — in a progressive system it cannot. Forgetting the Social Security cap: above $184,500 the later paychecks are larger, and a budget built on January's paycheck is too tight for December's.