Getting a bonus is exciting—but figuring out how much you actually take home after taxes can be confusing. Bonuses are considered supplemental wages by the IRS, which means they’re taxed differently than your regular paycheck. The good news is that once you know the rules, you can estimate your bonus after taxes with just a few steps.
Quick Answer
- Flat-rate method (most common): Federal income tax withheld at 22% for bonuses under $1 million.
- Aggregate method: Bonus added to your regular paycheck and taxed at your marginal bracket.
- Other deductions: Social Security (6.2%), Medicare (1.45%), state/local taxes, and benefit contributions.
- Large bonuses: Anything over $1 million is subject to 37% federal withholding.
Step 1: Start with Your Gross Bonus
This is the amount your employer promises before taxes. Example: $5,000 bonus.
Step 2: Apply Federal Income Tax
Flat-Rate Method (most common)
- Federal tax = 22% × $5,000 = $1,100 withheld
Aggregate Method
- Bonus is combined with your salary for the pay period.
- If it pushes you into a higher bracket, withholding may be more than 22%.
👉 For a quick estimate, check out our bonus paycheck calculator.
Step 3: Subtract Social Security and Medicare (FICA)
- Social Security: 6.2% (up to the 2025 wage base limit of $176,100).
- Medicare: 1.45% of all wages.
- Additional Medicare: 0.9% if total wages exceed $200,000 (single) or $250,000 (married).
Example on $5,000 bonus:
- Social Security: $310
- Medicare: $72.50
- Total FICA = $382.50
Step 4: Account for State and Local Taxes
States vary:
- California: 10.23% flat on supplemental wages.
- New York: Taxed at regular income tax rates.
- Texas/Florida: No state income tax.
Step 5: Final Net Bonus
Example: $5,000 bonus (single filer, no state tax, flat method):
- Federal: $1,100
- FICA: $382.50
- Net bonus = $3,517.50
👉 You can also use our federal tax updates 2025 calculator to see how new tax brackets impact your overall pay.
Example Table: Bonus After Taxes
| Gross Bonus | Federal (22%) | FICA | State Tax (5%) | Net Pay |
|---|---|---|---|---|
| $1,000 | $220 | $76.50 | $50 | $653.50 |
| $5,000 | $1,100 | $382.50 | $250 | $3,267.50 |
| $10,000 | $2,200 | $765.00 | $500 | $6,535.00 |
FAQs: Bonus Taxes in 2025
- Why is my bonus taxed higher than my paycheck?
It looks higher due to the flat 22% withholding, but actual tax is based on your year-end return. - Do bonuses count toward Social Security and Medicare?
Yes, they’re treated as wages. - Can I reduce my bonus tax?
You can defer part into a 401(k) or HSA if your plan allows. - What if I get more than $1 million in bonuses?
The IRS requires a 37% withholding rate above that amount. - Will I get some bonus tax back at filing time?
Yes, if too much was withheld, you’ll get a refund.
Bettye is the creator of CityPaycheckCalculator.com, a resource designed to help individuals quickly and accurately estimate their take-home pay across U.S. cities. With a strong focus on clarity, accuracy, and user experience, Bettye provides reliable paycheck calculators and helpful insights to support smarter financial decisions. Her mission is to make complex payroll and tax information simple and accessible for everyone.