How Is a Bonus Taxed? Why 22% Comes Out
A bonus is supplemental pay: 22% federal withholding, plus Social Security, Medicare, and state tax. Why it feels overtaxed, what you actually keep on a $5,000 bonus, and how to estimate take-home.
The flat 22% supplemental rate
The IRS treats a bonus as supplemental wages, and the common method withholds federal income tax on it at a flat 22% instead of running it through your normal paycheck tables. Anything above $1 million in a year is withheld at 37%. That flat rate is why a bonus can feel taxed harder than your salary. The Bonus Tax calculator applies it along with the other withholdings.
The other pieces: FICA and state
On top of the 22% federal come Social Security (6.2%), Medicare (1.45%), and your state income tax. On a $5,000 bonus at a 5% state rate, that is $1,100 federal + $310 Social Security + $72.50 Medicare + $250 state = about $1,732 withheld, leaving roughly $3,268 take-home. Enter your own state rate in the calculator to see the split.
Withholding is not your final tax
This is the key point: the 22% is withholding, not your final bill. Your actual tax depends on your total income for the year, settled when you file. If 22% is more than your real rate — common for middle incomes — the difference comes back as a refund. If your marginal rate is higher, you may owe a little more.
Getting a target take-home
If an employer wants you to net a specific amount — say a clean $5,000 in hand — they "gross up" the payment so the figure survives withholding. The Gross-Up calculator works that backward. For your regular wages rather than a bonus, the Paycheck calculator estimates the full set of deductions.
Frequently asked questions
A bonus is supplemental pay. The flat method withholds 22% for federal income tax (37% over $1 million), plus Social Security 6.2%, Medicare 1.45%, and any state tax. That withholding is not your final tax — it settles at filing.
The flat 22% federal rate plus FICA and state tax can add up to 35–40% withheld. It often takes out more than your normal paycheck percentage, and you get the extra back as a refund if your real rate is lower.
At a 5% state rate, roughly $3,268. The $5,000 loses 22% federal ($1,100), 6.2% Social Security ($310), 1.45% Medicare ($72.50), and $250 state.
You cannot change the withholding rate, but routing the bonus into a 401(k) or HSA reduces taxable income. The flat 22% is only withholding; your real liability depends on total income for the year.