What is the difference between the flat rate and aggregate method?

The flat method applies a fixed 22% (37% over $1M) to the bonus. The aggregate method adds the bonus to your most recent regular paycheck, taxes the total using progressive brackets, then subtracts the tax on the regular wages — often producing higher withholding. Your employer chooses the method.

Bonus Tax Calculator 2026 - Supplemental Wage Tax by State

Bonus Amount ($)

Supplemental wage or bonus payment

Regular Annual Salary ($)

Used for the aggregate method calculation

Filing Status

Affects standard deduction and Medicare threshold

Pay Frequency

Used to estimate per-paycheck take-home

State

State supplemental withholding rate

Disclaimer

This tool provides estimates for educational purposes only and is not tax advice. Results use 2026 federal figures and common state supplemental rates. Your actual withholding may vary based on employer methods, local taxes, and your full tax situation. Consult a qualified tax professional before making financial decisions.

How this is calculated

Bonuses and other supplemental wages (commissions, overtime in some cases, severance) are subject to special federal withholding rules under IRS Publication 15. There are two methods your employer can use:

Flat rate method: The IRS allows a flat 22% federal withholding on supplemental wages up to $1 million. For amounts exceeding $1 million, the excess is taxed at 37%.
Aggregate method: The bonus is added to your most recent regular paycheck, tax is calculated on the total using progressive brackets, then the tax on the regular wages alone is subtracted. This method often results in higher withholding because it pushes the total into a higher bracket temporarily.
FICA: Social Security at 6.2% (up to the $184,500 wage base for 2026) and Medicare at 1.45% (no cap) apply to bonuses. An additional 0.9% Medicare tax applies to wages above $200,000 (single) or $250,000 (married filing jointly).
State tax: Many states have a flat supplemental withholding rate that differs from their regular income tax brackets. States like Texas and Florida have no state income tax.

Sources

Reviewed against 2026 figures · Last updated June 6, 2026

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What is Bonus Tax Calculator?

A bonus tax calculator estimates the federal and state tax withholding on supplemental wages — bonuses, commissions, and other one-time payments. For 2026, the IRS allows employers to use either a flat 22% federal rate (37% on amounts over $1 million) or the aggregate method, which adds the bonus to regular wages and applies progressive brackets. FICA (Social Security and Medicare) also applies. This tool compares both federal methods and shows your take-home amount.

How to Use

Enter the bonus or supplemental wage amount you received (or expect to receive).
Enter your regular annual salary — this is needed for the aggregate method comparison.
Choose your filing status (affects the standard deduction and Additional Medicare threshold).
Select your pay frequency to see per-paycheck take-home estimates.
Pick your state to see the state supplemental withholding on your bonus.
Click Calculate to compare flat rate vs aggregate method and see your total tax and take-home.

Why Use This Tool?

Compare the flat rate (22%) vs aggregate method to see which withholds less

See the exact FICA breakdown: Social Security, Medicare, and Additional Medicare

Understand your state supplemental withholding rate

Know your effective bonus tax rate and actual take-home amount

Plan ahead for year-end bonuses or commission checks

Avoid surprises when your bonus paycheck arrives

Tips & Best Practices

The flat 22% rate is often lower than the aggregate method for mid-income earners
Withholding is not the same as your actual tax — you may get a refund or owe more at tax time
Bonuses over $1 million are subject to a mandatory 37% federal rate on the excess
Consider increasing your 401(k) contribution before a bonus to reduce taxable income
State supplemental rates can differ significantly from regular state tax brackets
If your employer uses the aggregate method, your bonus withholding may look much higher than 22%

Frequently Asked Questions

Why is my bonus taxed so high?

Bonuses often appear to be taxed at a higher rate because of how withholding works. If your employer uses the aggregate method, the bonus is added to your regular wages and the entire amount is taxed as if you earn that much every pay period, pushing you into a higher bracket temporarily. Even with the flat 22% rate, FICA (7.65%) and state taxes bring the total withholding to 30%–40% in many states. Remember: withholding is not your final tax bill — you may get a refund when you file.

What is the federal supplemental wage tax rate?

For 2026, the IRS allows a flat 22% federal withholding rate on supplemental wages (bonuses, commissions, severance) up to $1 million. For supplemental wages exceeding $1 million, the excess is subject to a mandatory 37% rate. Employers may also use the aggregate method instead, which can result in higher withholding.

What is the difference between flat rate and aggregate method?

The flat rate method applies a fixed 22% (or 37% over $1M) to the bonus amount. The aggregate method adds the bonus to your most recent regular paycheck, calculates tax on the combined total using progressive brackets, then subtracts the tax on regular wages alone. The aggregate method often results in higher withholding because it temporarily pushes your income into a higher bracket. Your employer chooses which method to use.

Are bonuses subject to Social Security and Medicare?

Yes. Bonuses are considered wages and are subject to FICA taxes: 6.2% for Social Security (up to the $184,500 wage base in 2026) and 1.45% for Medicare (no cap). If your total wages exceed $200,000 (single) or $250,000 (married filing jointly), an additional 0.9% Medicare tax applies to the excess. Your employer matches the Social Security and Medicare portions.

How are bonuses taxed in my state?

Most states tax bonuses as regular income, but many have a specific supplemental withholding rate. For example, California withholds at 10.23%, New York at 11.70%, and Illinois at 4.95%. States like Texas, Florida, and Washington have no state income tax. Check your state's revenue department for the current supplemental rate, as these can change.

Can I reduce the tax on my bonus?

You cannot avoid tax on a bonus, but you can reduce the impact: (1) Increase your 401(k) or 403(b) contributions before the bonus is paid to lower taxable income. (2) Ask your employer to use the flat rate method if they currently use aggregate — it often withholds less. (3) Time the bonus to a year when your income is lower. (4) Remember that withholding is not your final tax — over-withholding just means a bigger refund at tax time.