My Bonus After Taxes (2026)
You did the work all year, the bonus letter says $10,000 — and then the deposit lands at something like $7,000. Nobody stole it. That's just how the U.S. tax system treats supplemental wages: bonuses are withheld differently from regular salary, and the gap between the announcement and the deposit surprises almost everyone, every December.
This page explains exactly where the money goes. When you're ready for your own numbers, run them through our Bonus Tax Calculator — it applies the same rules below to any bonus amount, including state tax.
Why your bonus shrinks: the three cuts
1. Federal withholding at a flat 22%. The IRS classifies bonuses as supplemental wages, and employers withhold federal income tax at a flat 22% on supplemental pay up to $1 million in a calendar year (37% above that), per IRS Publication 15 for 2026. Note this is withholding, not your final tax — more on that below.
2. FICA: 7.65% off the top. Social Security (6.2%, up to the 2026 wage base of $184,500) plus Medicare (1.45%, no cap) applies to bonus dollars exactly like salary dollars.
3. State income tax. This is the wild card — from 0% in Texas and Florida to double digits in California and New York. Our calculator covers state bonus rates where tables are published.
Worked example: a $10,000 bonus
Single filer, no state tax for simplicity, under the Social Security wage base:
| Step | Calculation | Result |
|---|---|---|
| Gross bonus | — | $10,000.00 |
| Federal withholding | $10,000 × 22% | −$2,200.00 |
| Social Security | $10,000 × 6.2% | −$620.00 |
| Medicare | $10,000 × 1.45% | −$145.00 |
| You keep (before state tax) | $10,000 − $2,965 | $7,035.00 |
Add a typical state — say 5% — and another $500 disappears: $6,535 in hand. That's the number to plan around, not the $10,000 on the letter.
Withholding is not your actual tax
This is the part that saves people real anxiety in April. The 22% flat withholding is your employer's estimate, computed per IRS withholding tables. Your actual tax is computed on your Form 1040 from total annual income at your marginal brackets. If your marginal rate is 12%, that $10,000 bonus really costs you about $1,200 in federal tax — and the extra $1,000 withheld comes back as a refund. If you're in the 32% bracket, you may owe a bit more at filing. Either way, the withholding and the true liability settle up once a year.
FAQ
Is my bonus taxed at a higher rate than my salary? No — not in the sense that matters. The withholding rate (flat 22%) is often higher than your marginal bracket, which is why the paycheck looks harsh. Your actual tax on the bonus is at your normal marginal rate, settled when you file.
Why is the withholding a flat 22% instead of my bracket? Because the IRS gives employers a simplified option for supplemental wages: withhold 22% flat rather than running the full bracket calculation. It's administratively simpler and roughly right for most earners; the exact-up happens on your return.
Do bonuses count toward the Social Security wage base? Yes. Bonus dollars are wages for FICA purposes. If your salary already passed the 2026 $184,500 Social Security wage base, the 6.2% slice drops off the bonus too — a nice late-year surprise for high earners.
What about a bonus over $1 million? The flat withholding rate jumps to 37% on the amount above $1 million in supplemental wages for the year (IRS rule, unchanged for 2026). Our calculator models this threshold.
Should I ask my employer to change bonus withholding? You generally can't pick the supplemental flat rate — but you can adjust your Form W-4 withholding for the year to compensate if bonuses consistently over- or under-withhold for you.
Get your exact number
The example above uses round numbers and no state tax. Your bonus, your state, your situation — plug them into the Bonus Tax Calculator for the full breakdown: federal supplemental withholding, Social Security, Medicare, and state tax, with every step shown.
Method: federal supplemental-wage withholding per IRS Publication 15 (2026): 22% up to $1M, 37% above; FICA per SSA 2026 (6.2% to $184,500 wage base, 1.45% Medicare). State treatment varies. Estimates only, not tax advice — "estimates only, not tax advice."