Why a bonus check looks so heavily taxed
A bonus is not taxed at a special higher rate. It is added to your other income for the year and taxed in the same brackets. What looks different is the withholding: payroll takes a flat 22% federal tax from the bonus, plus Social Security, Medicare and any state tax.
Take a single filer earning $60,000 with a $5,000 bonus and no state income tax. $1,482.50 is withheld, so the bonus check is $3,517.50. The extra tax the bonus actually causes is $982.50, because most of it falls in the 12% bracket. The difference, about $500, comes back when you file. A $10,000 bonus works the same way: $7,685 stays with you, against a bonus check of $7,035.
What is taken out of a bonus check
- Federal income tax: a flat 22% on supplemental wages. The part of your supplemental wages above $1 million in a year is withheld at 37%.
- Social Security: 6.2%, but only until your wages for the year reach $184,500. If your salary is near that, less of the bonus is hit.
- Medicare: 1.45%, plus an extra 0.9% on wages above $200,000.
- State tax: each state sets its own supplemental rate. Where the state has payroll deductions, such as California disability insurance, they apply to the bonus too.
State withholding rates on bonuses in this calculator
| State | Rate withheld on the bonus |
|---|---|
| Texas, Florida, Tennessee and other states with no income tax | 0% |
| Illinois | 4.95% |
| North Carolina | 4.09% |
| California | 10.23% for bonuses, plus 1.3% disability insurance |
| Iowa | 3.8% |
A $5,000 bonus in California for the same $60,000 earner has $511.50 of state tax and $65.00 of disability insurance withheld, which is why the check can be much smaller than in a state without income tax.
If your bonus comes in your regular paycheck
This calculator uses the flat-rate method, which applies when a bonus is paid separately. Some employers instead add the bonus to a regular paycheck and withhold on the combined amount using your W-4. Withholding can then look different, although your tax for the year is the same either way. Ask payroll which method they use.
Ways to keep more of a bonus
Directing part of a bonus into a traditional 401(k) lowers the income it is taxed on. See what that does to your pay with the 401(k) paycheck calculator. You can also compare your regular pay in the paycheck calculator.
Bonus tax FAQ
Is a bonus taxed more than regular pay?
No. The tax is figured the same way. Only the withholding method is different, and any over-withholding is returned when you file.
How much is a $10,000 bonus after taxes?
For a single filer on $60,000 with no state income tax, about $7,685. It changes with your salary, filing status and state, so use the calculator above.
Why did I get a refund after my bonus?
Because 22% is more than the 12% or so that the bonus actually costs at this income. The extra withholding is returned at filing.
Do I pay Social Security tax on a bonus?
Yes, until your year's wages pass the $184,500 wage base. After that only Medicare applies.
Estimates assume 2026 federal rules and the standard deduction. State rates are the withholding rates for 2026 and employers may differ. This is not tax advice.