How to Use This Tool
Enter the bonus and your salary. The point of the calculation is the gap between what is withheld and what you owe, because only one of those is a tax.
22% is a withholding rate, not a tax rate
When a bonus is identified separately from salary, an employer may use the percentage method: a flat 22% of the supplemental payment, rising to 37% on supplemental wages above $1 million in the year.
That flat 22% is set by regulation. It is not your bracket, it is not a penalty on bonuses, and it does not depend on anything about you. It is a standardised deposit, chosen to be roughly right for a wide range of people and therefore exactly right for almost nobody.
Where the "40%" feeling comes from
Withholding is not the only thing leaving the bonus. On $10,000:
- Federal withholding at 22%: $2,200
- Social Security and Medicare at 7.65%: $765
- $2,965, or 29.65% — before state tax
A state with a 5% supplemental rate takes it to 34.65%, and a high-tax state pushes past 40%. Nothing was taxed at that rate. The bonus simply arrives with a year's worth of deductions visible in one line, where the same percentages on salary are spread across twenty-six payslips and never looked at.
It settles at filing, in both directions
Withholding is a deposit. At filing, your real tax is worked out on your total income and the deposits are subtracted.
- In the 12% bracket: you owe $1,200 on the bonus, $2,200 was withheld, and the extra $1,000 comes back as refund.
- In the 24% bracket: you owe $2,400 and are $200 short.
- In the 32% bracket: you owe $3,200 and are $1,000 short.
Higher earners are the ones who should pay attention, because the flat 22% systematically under-withholds against a 32%, 35% or 37% marginal rate. A large bonus can create an unexpected balance due, and if the shortfall is big enough, an underpayment penalty as well.
The other method
An employer may instead use the aggregate method: add the bonus to a regular payslip, work out withholding on the combined amount as though you were paid that much every period, then subtract what would have been withheld on the salary alone.
Because it annualises a one-off spike, this frequently withholds more than 22% — sometimes far more. It is not an error and it is not your employer being punitive. Both methods are permitted, and it is worth knowing which one your payroll uses before drawing conclusions from a payslip.
Things worth doing about it
- Contributing to a 401(k) from the bonus reduces the amount subject to income tax withholding, though not the Social Security and Medicare part. Whether your payroll allows it varies.
- Adjusting your W-4 for the rest of the year spreads a known shortfall out rather than meeting it in April.
- Not spending the whole net amount if you are in a high bracket, since some of it is still owed.
Figures are for tax year 2026. This is arithmetic, not tax advice.