How Bonuses Are Taxed in 2026: The 22% Myth and What You Actually Pay
The key distinction
Your bonus is withheld at 22%. It is taxed at your marginal rate. These are different numbers. Withholding is what your employer takes out of your paycheck. Your actual tax is determined when you file your return. If your marginal rate is 12%, you will get the difference back as a refund. If your marginal rate is 24% or higher, you will owe extra.
22% Withholding
$3,300
Actual Tax (22%)
$3,300
Owe Extra
$0
Your marginal rate matches the 22% withholding rate. No additional tax owed.
Two Ways Employers Withhold Bonus Tax
Flat 22% Method (Most Common)
Your employer withholds a flat 22% in federal tax from supplemental wages up to $1 million. Bonuses above $1 million are withheld at 37%. This is the simpler method and what most companies use. Social Security (6.2%) and Medicare (1.45%) are withheld separately on top of the 22%.
Aggregate Method
Your employer adds the bonus to your regular paycheck and withholds tax on the combined amount as if it were a single paycheck. This can result in higher withholding because the combined amount puts you in a higher bracket for that pay period. You get the excess back when filing.
FICA on Bonuses
Bonuses are subject to Social Security (6.2% up to the $184,500 wage base) and Medicare (1.45% plus 0.9% surtax above $200K) just like regular wages. The Social Security cap applies to your total compensation: if your base salary already exceeds $184,500, your bonus has zero SS tax withheld.
State Tax on Bonuses
States have their own supplemental wage withholding rates. Some use a flat rate, others use your regular withholding method. Key states:
| State | Supplemental Rate | Notes |
|---|---|---|
| California | 10.23% | Plus 1.1% SDI |
| New York | 11.70% | NYC adds 4.25% supplemental |
| Oregon | 9.90% | Top marginal rate |
| Illinois | 4.95% | Flat rate, same as regular wages |
| Pennsylvania | 3.07% | Flat rate |
| Texas / Florida / etc. | 0% | No income tax states |
Bonus Tax Examples at Three Salary Levels
$60,000 salary + $5,000 bonus
22% flat withholding
$1,100
Actual tax (12% marginal)
$600
At filing
refund of $500
$100,000 salary + $15,000 bonus
22% flat withholding
$3,300
Actual tax (22% marginal)
$3,300
At filing
roughly even
$200,000 salary + $50,000 bonus
22% flat withholding
$11,000
Actual tax (32% marginal)
$16,000
At filing
owe $5,000 extra
Will I Owe More or Get a Refund?
Simple rule: compare your marginal federal tax rate to the 22% withholding rate.
- Refund:If your marginal rate is 10% or 12% (taxable income under $50,400 single), you will get money back.
- Even:If your marginal rate is 22% (taxable income $50,401 to $105,700 single), withholding roughly matches actual tax.
- Owe more:If your marginal rate is 24% or higher (taxable income above $105,700 single), you will owe the difference when filing.