Bonus Tax Calculator 2025
Calculate federal and state tax withholding on your bonus using the IRS percentage method
38.95% effective rate
Note: The IRS uses a flat 22% federal tax rate for supplemental wages (bonuses) under $1 million. For bonuses over $1 million, the rate is 37%. State taxes vary by location.
How Bonus Tax Withholding Works in 2025
When you receive a bonus, your employer must withhold taxes using one of two IRS-approved methods. The most common is the percentage method, which applies a flat federal tax rate to your bonus amount. This calculator uses the percentage method to estimate your tax withholding.
For 2025, the IRS mandates a 22% federal tax rate for supplemental wages (bonuses) under $1 million. If your bonus exceeds $1 million, the rate increases to 37% for the amount over $1 million. This is separate from your regular paycheck tax withholding.
In addition to federal income tax, your bonus is subject to FICA taxes: 6.2% for Social Security (up to the annual wage base of $168,600) and 1.45% for Medicare. High earners may also pay an additional 0.9% Medicare tax on income exceeding $200,000 (single) or $250,000 (married filing jointly).
State income taxes also apply to bonuses in most states. Each state has different tax rates and rules for supplemental wages. States like Florida, Texas, and Nevada have no state income tax, meaning you'll keep more of your bonus. High-tax states like California and New York will withhold a larger percentage.
Your actual tax liability may differ from the withholding amount. When you file your annual tax return, the IRS treats your bonus as regular income, which could result in a refund or additional tax owed depending on your total income and deductions.
How to Calculate Your Bonus Tax
Enter Bonus Amount
Input your gross bonus amount before any taxes or deductions.
Select Filing Status
Choose single or married filing jointly for accurate Medicare tax calculation.
Choose Your State
Select your state to calculate state income tax withholding on your bonus.
View Results
See your net bonus after federal, state, and FICA tax withholding.
Frequently Asked Questions
What is the federal tax rate on bonuses in 2025?
The IRS requires a flat 22% federal tax withholding rate for bonuses under $1 million using the percentage method. Bonuses over $1 million are taxed at 37% for the amount exceeding $1 million.
Why is my bonus taxed at a higher rate than my regular paycheck?
Bonuses appear to be taxed higher because the IRS treats them as supplemental wages and requires a flat 22% withholding. However, when you file your tax return, your bonus is combined with your regular income and taxed at your actual marginal rate, which may result in a refund.
Do I pay Social Security and Medicare taxes on my bonus?
Yes, bonuses are subject to FICA taxes: 6.2% for Social Security (up to the $168,600 wage base for 2025) and 1.45% for Medicare. High earners may also pay an additional 0.9% Medicare tax.
How do state taxes affect my bonus?
Most states tax bonuses as regular income using their standard income tax rates. Nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) have no state income tax, so you'll keep more of your bonus in these states.
Can I reduce the tax withholding on my bonus?
Your employer determines the withholding method. If you believe too much is being withheld, you can adjust your W-4 form, but this affects your regular paycheck withholding too. Consult a tax professional for personalized advice.
Will I get a refund if too much tax is withheld from my bonus?
Yes, if your total tax withholding (including bonus withholding) exceeds your actual tax liability for the year, you'll receive a refund when you file your tax return. The IRS treats bonuses as regular income when calculating your final tax bill.
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