Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A bonus often gets withheld at a different, usually higher, flat supplemental rate than a regular paycheck, which is why a bonus can feel more heavily taxed in the moment than it actually turns out to be at tax-filing time. Withholding on a bonus and the bonus's actual tax liability are two separate numbers, and they only reconcile once the whole year's return gets filed.
Before you rely on it
What to check
Treat the withheld amount as a deposit against the year's total liability, not as the bonus's final tax cost: the actual rate gets determined later, on the full return.
The common error
Where people go wrong with bonus take-home calculator
Assuming the withholding rate applied to a bonus is the real tax rate on that income. It's frequently higher than a filer's actual marginal rate, and the difference typically comes back as part of a refund.
Sensitivity evidence
How gross bonus changes the estimated net bonus
| Gross bonus | Estimated net bonus | Estimated total withholding | Net share of bonus |
|---|---|---|---|
| $12,000 | $7,842 | $4,158 | 65.3% |
| $13,500 | $8,822 | $4,678 | 65.3% |
| $15,000worked example | $9,803 | $5,198 | 65.3% |
| $16,500 | $10,783 | $5,717 | 65.3% |
| $18,000 | $11,763 | $6,237 | 65.3% |
Every input, tested
Which input moves the estimated net bonus most
| Input | Tested from | To | Estimated net bonus at each end | Swing |
|---|---|---|---|---|
| Gross bonus | $13,500 | $16,500 | $8,822 to $10,783 | $1,961 (20%) |
| Federal withholding rate | 20.0% | 24.0% | $10,103 to $9,503 | $600 (6.1%) |
| State withholding rate | 4.0% | 6.0% | $9,953 to $9,653 | $300 (3.1%) |
| Payroll tax rate | 6.7% | 8.7% | $9,953 to $9,653 | $300 (3.1%) |
Two variables at once
Estimated net bonus by gross bonus and federal withholding rate
| Gross bonus \ Federal withholding rate | 18.0% | 22.0% | 26.0% |
|---|---|---|---|
| $12,000 | $8,322 | $7,842 | $7,362 |
| $13,500 | $9,362 | $8,822 | $8,282 |
| $15,000 | $10,403 | $9,803 | $9,203 |
| $16,500 | $11,443 | $10,783 | $10,123 |
| $18,000 | $12,483 | $11,763 | $11,043 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Gross bonus | $15,000 |
| Federal withholding rate | 22.0% |
| State withholding rate | 5.0% |
| Payroll tax rate | 7.7% |
| Estimated net bonus | $9,803 |
| Estimated total withholding | $5,198 |
| Net share of bonus | 65.3% |
Where the inputs come from
Gross bonus is the amount before withholding. Federal withholding on bonuses paid separately from regular pay usually uses the flat supplemental rate of 22%, or 37% on supplemental wages above $1 million in a year, though employers may combine the bonus with regular pay instead. Enter the state withholding rate your employer uses and the payroll tax rate, 7.65% for Social Security and Medicare on most earners. Check your pay stub after a past bonus to see the rates used.
Using the estimated net bonus in a real decision
Bonuses are not taxed at a higher rate in the end; they are added to your income for the year, so your actual tax is settled on your return, and if too much was withheld you get it back as a refund.
When the result stops applying
Withholding is an estimate and depends on how the employer treats the payment, so the amount actually withheld can differ. Retirement contributions from a bonus reduce taxable income. Very high earners may face additional Medicare tax. The result does not include local taxes. State supplemental rates differ.
What to compare it with
See how a bonus fits the whole year with the federal income tax and tax withholding calculators, and paycheck effects on the take-home pay page. If you can direct part of the bonus to a 401(k) or HSA, the take-home cost is smaller than the amount contributed. The overtime pay calculator covers other extra pay.
People also ask
Frequently asked questions
Why is my bonus taxed so heavily?
It is withheld at a flat supplemental rate, often 22% federally, plus payroll taxes and state tax, which can look large but is only withholding. Your true tax is set on your return.
Is a bonus taxed at a higher rate than regular pay?
No. It is added to your income and taxed at your normal brackets. The withholding rate can be higher than your actual rate, and the difference comes back as a refund.
Can I reduce tax on a bonus?
Yes, by directing part of it to a traditional 401(k), an HSA or another pre-tax benefit, which lowers your taxable income for the year.