Bonus tax calculator
This is what gets withheld, not what you finally owe. A normal bonus is held at 22%. Once supplemental pay for the year crosses $1 million, the extra is held at 37%. FICA is not in this.
Result
Federal income tax withheld
$1,100.00
Bonus after that withholding
$3,900.00
Here’s one
A $5,000 bonus, nothing else supplemental this year
A $5,000 bonus, with nothing else like it paid this year, is withheld at 22%. That’s $1,100. The 37% rate only shows up after supplemental wages for the year pass $1 million.
How it works
Whatever still fits under $1 million of supplemental pay this year is held at 22%. The rest of this bonus is held at 37%.
Where this comes from
Payroll often holds a flat 22% on a bonus. Once supplemental wages for the year pass $1 million, the rest is held at 37%. That is withholding, not the tax you finally owe. Publication 15, section 7, is the rule.
Good for
Payroll uses the flat bonus method. Your actual tax bill can be higher or lower.
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Don’t file a return from this