How this number is made
A bonus check is often smaller than people expect because federal tax is withheld at a flat supplemental rate, then Social Security, Medicare, and state tax come off too. The flat rate is a withholding rule. Your real bracket can be different, and the difference shows up when you file.
- Use the gross bonus, before any tax.
- Wages already paid let Social Security stop at the $184,500 wage base and let the extra 0.9% Medicare tax start at the right place.
- If you already received other bonuses this year, add them. Supplemental wages over $1 million are withheld at 37% on the excess.
Formula
Federal withholding = 22% of the bonus, or 37% on the part that pushes year-to-date supplemental wages past $1 million. FICA uses the same employee rates as the paycheck page, on wages including this bonus. State tax = bonus × the rate you set.
Worked example
A $5,000 bonus, with $70,000 of wages already paid, is withheld at 22% federally: $1,100. Social Security is $310. Medicare is $72.50. Georgia at 5.19% is $259.50. Take-home is $3,258. That is not a promise the bonus is taxed at 22% on the return.
Questions
Why was my bonus taxed more than my salary?
The withholding rate on a bonus is often a flat 22%, which can be higher than the withholding on a regular check. It is not a separate bonus tax. If 22% was too much for your bracket, the return reconciles it.
Does this include 401(k) on the bonus?
No. Some plans defer a percent of bonuses and some do not. Subtract that deferral from the gross bonus first if your plan takes it before tax.