Bonus tax calculator

What is a bonus tax calculator?

A bonus tax calculator is a free online tool that estimates how much of a work bonus you actually keep after tax. In the United States a bonus is a form of supplemental wage, and employers withhold tax from it separately from your regular paycheck. This calculator applies a federal supplemental rate, an optional state rate, and — when you want it — FICA (Social Security and Medicare) to your gross bonus, then shows each tax alongside the net amount you take home.

It is handy the moment a bonus is announced. Rather than being surprised when the deposit lands, you can see the tax bite as a clear dollar figure and know your net bonus in advance.

How does the bonus tax calculator work?

You provide the bonus and the rates that apply to you:

• Bonus amount — the gross bonus before any tax is withheld.
• Federal supplemental tax rate — the percentage the IRS withholds on supplemental wages. It defaults to 22%, the flat rate for bonuses up to $1 million under the percentage method.
• State tax rate — the percentage your state withholds. It defaults to 5%; set it to 0% if your state does not tax wages, or to your state’s actual supplemental rate.
• Include FICA — a toggle, on by default, that adds Social Security (6.2%) and Medicare (1.45%). Turn it off to see only income-tax withholding.

The calculator multiplies the bonus by each rate to find the federal and state taxes, adds FICA when the toggle is on, sums everything into the total tax, and subtracts that total from the bonus to reveal the net bonus. It also reports the effective tax rate — total tax as a percentage of the bonus.

Formula

Each income tax is a percentage of the gross bonus:

$$\text{Federal tax} = \text{Bonus} \times \frac{\text{Federal \%}}{100}$$ $$\text{State tax} = \text{Bonus} \times \frac{\text{State \%}}{100}$$

FICA combines Social Security and Medicare (applied only when the toggle is on):

$$\text{FICA} = \text{Bonus} \times (0.062 + 0.0145)$$

The total tax, net bonus, and effective rate follow directly:

$$\text{Total tax} = \text{Federal tax} + \text{State tax} + \text{FICA}$$ $$\text{Net bonus} = \text{Bonus} - \text{Total tax}$$ $$\text{Effective rate} = \frac{\text{Total tax}}{\text{Bonus}} \times 100$$

Worked examples

Example 1 — a $10,000 bonus at 22% federal and 5% state, with FICA included.

• Federal tax = $10,000 × 22 ÷ 100 = $2,200
• State tax = $10,000 × 5 ÷ 100 = $500
• FICA = $10,000 × (0.062 + 0.0145) = $765
• Total tax = $2,200 + $500 + $765 = $3,465
• Net bonus = $10,000 − $3,465 = $6,535
• Effective rate = $3,465 ÷ $10,000 × 100 = 34.65%

Example 2 — the same $10,000 bonus at 22% federal, a state with no wage tax (0%), and FICA excluded.

• Federal tax = $10,000 × 22 ÷ 100 = $2,200
• State tax = $10,000 × 0 ÷ 100 = $0
• FICA = $0 (toggle off)
• Total tax = $2,200
• Net bonus = $10,000 − $2,200 = $7,800
• Effective rate = $2,200 ÷ $10,000 × 100 = 22%

Practical notes

• The 22% default is a flat withholding rate, not your final tax. When you file, the bonus is taxed at your actual marginal rate, so you may get some withholding back or owe a little more.
• Bonuses above $1 million are withheld at 37% on the portion over the threshold under the federal percentage method.
• Social Security tax stops once your year-to-date wages pass the annual wage base, so a late-year bonus may have little or no Social Security withheld even with the toggle on.
• State rules vary widely: some states have no income tax, while others apply their own supplemental rate.

FAQs

Why is the federal rate set to 22% by default?

22% is the flat IRS percentage-method withholding rate for supplemental wages such as bonuses, up to $1 million in a year. You can change it to model a different scenario or the aggregate method.

What does the “Include FICA” toggle do?

When on, it adds Social Security (6.2%) and Medicare (1.45%) to the tax — the payroll taxes withheld from almost all wages. Turn it off to see only federal and state income-tax withholding.

Is the net bonus my final take-home amount?

It is an estimate based on the rates you enter. Your final tax depends on your total annual income, so the amount withheld here may differ from what you ultimately owe.