Bonus Tax Calculator - Calculate Tax on Bonus Pay
Free calculator to estimate federal withholding, FICA taxes, and take-home bonus pay for 2025 using percentage or aggregate method
Bonus Tax Calculator 2025
Results
What is a Bonus Tax Calculator?
A Bonus Tax Calculator is a free financial tool that helps you estimate the taxes withheld from your bonus pay and calculate your actual take-home amount. It accounts for federal withholding using either the percentage method (22% or 37%) or aggregate method, plus FICA taxes (Social Security and Medicare) and state taxes.
This calculator is essential for:
- Bonus planning - Know your net bonus before you receive it
- Tax withholding strategy - Compare percentage vs aggregate methods
- Financial planning - Budget accurately with expected take-home pay
- Negotiation preparation - Understand net value of bonus offers
- Year-end tax planning - Estimate total tax impact on annual income
For calculating total federal income tax including your bonus, use our Federal Income Tax Calculator to determine your complete annual tax liability and effective rate.
To understand payroll taxes on your regular salary, explore our Payroll Tax Calculator for comprehensive FICA and federal withholding calculations.
For evaluating salary increases alongside bonuses, check our Pay Raise Calculator to see the combined impact on your take-home income.
To calculate total annual income including bonuses and overtime, try our Annual Income Calculator for comprehensive income planning.
For understanding overtime pay calculations, use our Overtime Calculator to determine additional earnings and tax implications.
How Bonus Tax Calculator Works
The calculation follows IRS guidelines for supplemental wage withholding (2025):
Percentage Method (Most Common)
Federal Tax = Bonus × 22% (if bonus < $1M)
Federal Tax = Bonus × 37% (if bonus ≥ $1M)
FICA Taxes
Social Security = Bonus × 6.2% (up to $176,100 wage base)
Medicare = Bonus × 1.45% (all wages)
Additional Medicare = (Bonus × 0.9%) if income > $200K single
State Tax
State Tax = Bonus × State Tax Rate
Net Bonus
Take-Home = Bonus - (Federal + FICA + State)
The aggregate method combines your bonus with regular wages, calculates total withholding, then subtracts regular wage withholding. Most employers use the simpler percentage method.
Key Concepts Explained
Supplemental Wages
Bonuses are classified as supplemental wages, separate from regular salary. They're subject to different withholding rules than regular paychecks, typically using a flat 22% federal rate for amounts under $1 million.
Percentage Method
The flat-rate withholding method where bonuses under $1M are taxed at 22% and over $1M at 37%. This is the simplest method and most commonly used by employers for bonus calculations and withholding.
FICA Taxes
Federal Insurance Contributions Act taxes include Social Security (6.2% up to $176,100 wage base for 2025) and Medicare (1.45% on all wages, plus 0.9% additional Medicare tax on high earners over $200K single).
Withholding vs Actual Tax
The 22% withheld is often higher than your actual tax rate. When filing your tax return, you may receive a refund if total withholding exceeds your actual tax liability based on your effective rate.
How to Use This Calculator
- Enter your bonus amount - Input the gross bonus amount before any taxes or deductions
- Enter your annual salary - Your regular annual salary helps determine Medicare Additional Tax and provides context for tax planning
- Select filing status - Choose Single, Married Filing Jointly, Married Filing Separately, or Head of Household
- Choose tax method - Select Percentage Method (22%/37%) or Aggregate Method for federal withholding calculation
- Enter state tax rate - Input your state's income tax rate (use 0 for states with no income tax like Texas or Florida)
- Click Calculate - View your net bonus, all tax withholdings, and effective tax rate instantly
- Review the breakdown - Analyze federal, FICA, and state taxes to understand where your bonus money goes
Benefits of Using This Calculator
- Accurate withholding estimates - Calculate exact federal, FICA, and state tax withholdings using 2025 IRS rates and wage base limits
- Financial planning precision - Know your actual take-home bonus amount for budgeting major purchases, investments, or debt payoff
- Method comparison - Compare percentage vs aggregate withholding methods to understand which your employer uses
- Tax strategy insights - Identify opportunities to reduce tax burden through 401(k), HSA, or IRA contributions before bonus payment
- Negotiation power - Understand net value of bonus offers to make informed decisions during salary negotiations
- Year-end tax planning - Estimate total tax impact when bonuses push you into higher brackets or trigger additional Medicare tax
Factors That Affect Your Results
- Bonus size threshold - Bonuses over $1 million are withheld at 37% instead of 22%, significantly increasing federal withholding on large bonuses
- Withholding method chosen - Percentage method uses flat 22% while aggregate method may result in higher or lower withholding based on your regular pay rate
- Social Security wage base - If you've already earned $176,100 in 2025, your bonus is exempt from the 6.2% Social Security tax
- Additional Medicare tax - High earners pay extra 0.9% Medicare tax on wages over $200K (single) or $250K (married), affecting bonus withholding
- State tax rates - State income tax ranges from 0% (no tax states) to over 10% (CA, NY), dramatically affecting take-home bonus
- Pre-tax contributions - Contributing bonus to 401(k), HSA, or traditional IRA reduces taxable amount and increases take-home through tax savings
Frequently Asked Questions
How are bonuses taxed in 2025?
Bonuses are considered supplemental wages and are typically taxed using the flat percentage method at 22% for federal withholding if under $1 million, or 37% for amounts over $1 million. State and FICA taxes also apply.
Why is my bonus taxed at a higher rate?
Bonuses appear to be taxed higher due to withholding rates, not actual tax rates. The 22% federal withholding is often more than your effective rate. You may receive a refund when filing your tax return if too much was withheld.
What is the difference between percentage method and aggregate method?
The percentage method taxes bonuses at a flat 22% rate separately from regular wages. The aggregate method combines bonus and regular wages, calculates total withholding, then subtracts regular withholding. Employers typically choose which method to use.
Are bonuses subject to FICA taxes?
Yes, bonuses are subject to Social Security (6.2% up to $176,100 wage base for 2025) and Medicare (1.45% on all wages, plus 0.9% additional Medicare tax on wages over $200,000 for single filers).
Can I reduce the tax on my bonus?
You can reduce your tax burden by contributing the bonus to a 401(k), HSA, or traditional IRA before taxes. These pre-tax contributions lower your taxable income and reduce the amount withheld from your bonus.
Will my bonus affect my tax bracket?
Your bonus is added to your annual income and may push you into a higher tax bracket. However, only the income within the higher bracket is taxed at that rate, not your entire income. Use this calculator to estimate your total tax liability.