A bonus is withheld at 22% flat, and whether that is too much depends on what you already earn
Published 2026-11-09 · updated 2026-11-09 · figures for tax year 2026
A bonus is withheld at 22% flat. Your salary is withheld from the tax table. Two different machines, one payslip. The 22% is not a penalty and not a privilege — it is a guess written into the form, and every year it lands on the wrong side of the answer for someone. This page measures how far off it lands, at five income levels, using the same $10,000 increment each time.
What the flat rate is actually doing
Supplemental wages — bonuses, commissions, retroactive raises — are withheld at 22% federally as long as the total stays under the million-dollar withholding threshold. It is a flat guess, applied without reference to the standard deduction, the bracket you are in, or anything else payroll knows about you. The regular wage withholding, by contrast, is computed from the annualised table and does account for the deduction. So the two mechanisms disagree by construction, and the only question is which direction.
The same $10,000, at five incomes
Column four is the answer: what the flat 22% withheld, minus what the tax table says is actually owed on that same increment. A negative number is money coming back in April. A positive number is money owed.
| Salary before the bonus | Federal tax on the $10,000 | Effective federal rate on it | 22% withheld minus actual |
|---|---|---|---|
| $40,000 | $1,200 | 12.0% | −$1,000 refund |
| $60,000 | $1,550 | 15.5% | −$650 refund |
| $120,000 | $2,364 | 23.6% | +$164 owed |
| $150,000 | $2,400 | 24.0% | +$200 owed |
| $200,000 | $2,400 | 24.0% | +$200 owed |
At $60,000 the full federal bill is $5,020; adding the $10,000 makes it $6,570 — a step of $1,550, or 15.5% of the bonus. The flat 22% withheld $650 too much, and that comes back as a refund. At $150,000 the same increment costs 24.0%, so 22% is $200 short and gets collected in April. The flat line crosses the real one somewhere between $60,000 and $120,000 — which is why two coworkers on the same plan can get opposite letters from the same payroll system.
Why the low end over-withholds
Not because of a special rule, but because of the arithmetic of brackets. At $60,000, $10,000 of extra pay fills the gap between the 12% band and the 22% band: most of the increment is still taxed at 12%, and only the top slice at 22%. The table knows this. The flat 22% does not — it applies the marginal rate to every dollar of the bonus, including the dollars that were never going to be taxed at 22%.
Why the high end under-withholds
The mirror image. At $150,000 the increment sits entirely inside the 24% band, so 22% is two points light on every dollar. At $200,000 the shortfall is the same$200, because 22% and 24% are both flat there — the gap stops growing, it does not disappear.
What this means for the money in your hand
The bonus payslip is not the settlement. It is a prepayment. If the flat rate over-withheld, the refund arrives after the return is filed; if it under-withheld, the balance is due then, possibly with an underpayment penalty if the shortfall is large and the year had no other cushion. Neither outcome changes the year's total tax by a cent — the increment is taxed at 15.5% to 24.0% federally regardless of how it was withheld. What changes is when the money moves, and in which direction.
The two numbers that make the guess survivable
State withholding is a separate flat guess. California takes $930 on the same $10,000 at $150,000 (an effective 9.3%), and the state has its own supplemental rate that is not required to match the federal one. Two flat guesses, two separate reconciliations.
FICA does not participate. Social Security and Medicare are computed on the bonus exactly as they are on wages — no flat rate, no reconciliation. At $150,000 the combined keep on the increment is 59.1%, which is the honest number for what a bonus is worth once everything has taken its share.
Figures use the 2026 federal table, the standard deduction, single filing status, and California. They assume the standard deduction, not itemised deductions, and that the bonus does not push you into a different treatment elsewhere on the return.
Put a number on it
The same mechanisms on an actual salary. Every figure here is computed by the engine that serves the calculators, so it matches the page it opens — nothing is copied.