Bonus tax calculator

Why your bonus looks so heavily taxed

A bonus is a supplemental wage, and employers withhold federal tax on it at a flat 22% (rising to 37% on supplemental wages above $1 million in a year), plus state supplemental tax and FICA. That is identical to how RSU vests are withheld - which is why a bonus and an equal RSU vest net the same amount. This calculator breaks out each piece.

Worked example

A $50,000 bonus in California, with $200,000 of prior wages this year:

• Federal (22% supplemental): $11,000
• California (10.23%): $5,115
• Social Security: $0 - already over the $184,500 wage base
• Medicare (1.45% + 0.9% surtax): $1,175
• Total withheld: about $17,290 (roughly 34.6%)
• Net to you: about $32,710

Withholding is not the same as your tax

The flat 22% is a withholding convention, not a separate, higher tax on bonuses. When you file, the bonus is simply added to your income and taxed at your normal marginal rate. So:

• If your marginal rate is below 22%, you may get some of the withholding back.
• If it is above 22% (32-37%, common for bonus recipients), the flat rate under-withheld and you may owe more at filing.

How to keep more of it

You cannot avoid the tax, but you can defer it:

• Direct the bonus into your 401(k) (if your plan allows bonus deferral) to reduce this year taxable income.
• Fund an HSA if eligible.
• Use a deferred compensation plan, if your employer offers one, to push the income to a lower-income year.

Common mistakes

• Assuming the 22% is your final tax - high earners often owe more.
• Spending the gross figure before withholding.
• Missing the chance to defer the bonus into tax-advantaged accounts.

A bonus and an RSU vest are taxed the same way - compare with the RSU tax calculator; to cover any shortfall, see the estimated tax calculator.