Bonuses are considered "supplemental wages" by the IRS and are subject to different withholding rules. While the income is ultimately taxed at your regular marginal rate when you file your annual return, the amount withheld from the bonus check itself can be higher. This often makes it feel like it's "taxed more."

Percentage Method: This is the simplest method. Your employer withholds a flat 22% for federal taxes, regardless of your income bracket or filing status. This is common for bonuses paid in a separate check from your regular pay.

Aggregate Method: Your employer combines your bonus with your regular wages for the pay period and calculates withholding on the total amount as if it were a single, large paycheck. This can push you into a higher withholding bracket for that pay period, resulting in a higher effective tax rate on the bonus.

YTD earnings are crucial for calculating Social Security tax. In 2024, you only pay Social Security tax (6.2%) on the first $168,600 of your income. If your YTD earnings plus your bonus exceed this limit, you will only be taxed on the portion that falls under the cap. This calculator accounts for that limit.

State taxation rules vary widely. Some states have a flat supplemental withholding rate, similar to the federal method. Others require using the aggregate method. Some states, like Texas, have no state income tax at all. This calculator provides estimates for a few common states but does not cover all state and local tax laws.

This calculator is for informational and educational purposes only. The results are estimates based on the information you provide and simplified 2024 tax rules. It is not financial advice. Consult with a qualified professional for tax planning.