A bonus is not taxed at a special rate. It is withheld at a special rate — and the difference is money back or money owed at filing.
Uses 2026 federal brackets from IRS Revenue Procedure 2025-32, the $184,500 Social Security wage base, and the 22% supplemental withholding rate in IRS Publication 15.
Bonus paid into your account
$0
Withheld from the bonus
$0
Actual tax on the bonus
$0
At filing
$0
| Component | Rate | Amount |
|---|---|---|
| Federal income tax withheld | 22% | $0 |
| Social Security | 6.2% | $0 |
| Medicare | 1.45% | $0 |
| State income tax | 0% | $0 |
| Total withheld | — | $0 |
| Paid into your account | — | $0 |
Bonuses are supplemental wages, and the IRS allows employers to withhold a flat 22% federal rate on supplemental payments up to $1 million in a calendar year, regardless of your actual bracket. That is a withholding rate, not your final tax. The bonus is added to your other income on the return and taxed at ordinary marginal rates, and the difference is settled when you file.
No. A bonus is ordinary income taxed at exactly the same rates as salary. It only looks more heavily taxed because of withholding. The flat 22% can exceed the marginal rate of a lower-bracket earner, producing a refund, or fall short for a higher-bracket earner, producing a balance due. Total tax is computed once, on the whole year's income.
Yes. Supplemental wages are subject to Social Security at 6.2% up to the annual wage base and Medicare at 1.45%, plus 0.9% Additional Medicare Tax once wages pass $200,000. If you have already reached the wage base when the bonus is paid, the Social Security portion no longer applies but Medicare still does.
You cannot avoid the tax because a bonus is ordinary income, but you can reduce the income it is measured against. Contributing the bonus to a traditional 401(k) if the plan allows it, funding an HSA, or timing deductible expenses all reduce taxable income in that year. Redirecting into pre-tax accounts is usually the most effective option.