Quick Answer
Bonuses are withheld at a flat 22% federal rate (37% on amounts over $1 million per year) plus the standard 7.65% FICA tax — but that's withholding, not your final tax rate. Your bonus is actually taxed as ordinary income at your regular marginal rate when you file, so you may get some of that 22% back as a refund, or owe more if your top bracket is above 22%.
A bonus hits your bank account and it's smaller than you expected — sometimes a lot smaller. That's not a mistake. Bonuses are withheld differently than your regular paycheck, and understanding the difference between withholding and what you actually owe explains almost every surprise here.
The flat 22% rate (and the 37% rate above $1 million)
Under IRS Publication 15, employers must withhold federal income tax on a bonus — a "supplemental wage" — at a flat 22%. If your cumulative supplemental wages for the year exceed $1 million, the amount over that threshold is withheld at 37%, the top individual tax rate.
Up to $1,000,000/year
Flat 22% federal withholding on the bonus.
Above $1,000,000/year
37% withholding on the amount over $1M in cumulative supplemental wages.
"Supplemental wages" is broader than just bonuses — it also covers commissions, overtime, severance, and other one-time payments outside your regular salary.
Withholding is not your tax rate
This is the part most people miss: the IRS does not tax bonuses at a special 22% rate. A bonus is ordinary income, taxed at your regular marginal tax bracket when you file. The 22% is only how much your employer sets aside up front. If your top bracket is 12% or 22%, you likely get some of that withholding back as a refund. If it's 32%, 35%, or 37%, you may owe more at tax time.
FICA still applies — the same as any other wages
A bonus is wages for FICA purposes, so the standard 7.65% comes out too — 6.2% Social Security (up to the $184,500 wage base) and 1.45% Medicare (no cap), plus 0.9% Additional Medicare Tax once your total wages for the year pass $200,000 (single) or $250,000 (married filing jointly). See our FICA guide for the full breakdown.
On a $5,000 bonus, that's roughly $1,100 in federal withholding (22%) plus about $383 in FICA — before any state or local tax — even before accounting for whether you actually owe the full 22% once you file.
The aggregate method: your employer's other option
- Flat method: withhold 22% on the bonus separately from your regular paycheck.
- Aggregate method: combine the bonus with your next regular paycheck and withhold based on the total, using your W-4 and the standard withholding tables — this can come out higher or lower than 22%, depending on your income.
Either way, it's still just withholding. To see what your bonus actually nets out to after federal, FICA, and state tax, use the bonus tax calculator. For how your marginal rate compares to what actually gets withheld across your whole paycheck, see effective vs. marginal tax rate.