Bonus Tax Calculator (2026) — Supplemental Wage Withholding
In reality, bonuses are classified as supplemental wages under IRS regulations (Publication 15, Employer's Tax Guide). They are not subject to a higher permanent tax bracket; rather, employers must follow special statutory withholding rules when processing bonus disbursements. For Tax Year 2026, federal regulations require a flat 22% statutory withholding on supplemental wages up to $1,000,000 (and 37% on amounts exceeding $1,000,000).
In addition to federal withholding, your bonus is subject to mandatory FICA payroll taxes: 6.2% Social Security (unless your cumulative year-to-date earnings have already surpassed the 2026 statutory cap of $184,500) and 1.45% Medicare (plus 0.9% Additional Medicare if your total wages exceed $200k/$250k). State withholding also applies, either as a flat supplemental rate (e.g., California's 10.23% supplemental rate) or calculated marginally based on your YTD wage bracket.
Crucially, withholding is merely an advance deposit with the IRS. When you file your annual Form 1040, your bonus is pooled with your regular salary. If your effective tax rate is lower than the amount withheld, the difference is fully refunded back to you.
Bonus & Supplemental Wage Details
IRS Pub 15This calculation reflects statutory IRS supplemental wage withholding under 26 U.S. Code § 3402(g) and IRS Publication 15. Withholding is an advance estimate. Your final tax liability is settled on your annual Form 1040 based on your comprehensive yearly taxable income, standard deduction, and tax credits.
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Official guidance, statutory formulas, and IRS benchmarks.
Are bonuses taxed at a higher rate than regular salary?
No. At year-end tax filing on Form 1040, bonuses are treated as ordinary earned income and taxed at the exact same progressive federal and state tax rates as your regular wages. However, payroll withholding on supplemental wages often uses a flat 22% federal rate plus state supplemental rates, which may feel higher than regular bi-weekly deductions.
What is the 2026 IRS federal withholding rate on bonuses?
Under IRS Publication 15, employers using the percentage method must withhold a flat 22% on supplemental wages up to $1,000,000. Any portion of supplemental wages paid to an employee that exceeds $1,000,000 in a calendar year must be withheld at the top individual rate of 37%.
Does Social Security tax get withheld from my bonus?
Yes, Social Security tax (6.2%) is withheld from your bonus unless your total year-to-date wages have already reached the 2026 Social Security statutory cap of $184,500. Once you cross $184,500, no further Social Security tax is withheld for the remainder of the calendar year.
Will I get money back if too much tax was withheld from my bonus?
Yes. If your effective marginal tax rate across the entire year is lower than the combined withholding on your bonus, the excess withholding will be credited toward your annual tax liability or refunded to you in full when you file your annual tax return.