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How Bonuses Are Taxed in 2026
You get a $10,000 bonus, then the deposit is barely $7,000 and it feels like the government took a third. The good news: bonuses are not taxed at a higher rate than your salary — they are withheld differently, and a lot of that money often comes back. Here is exactly what happens to a 2026 bonus.
Why a bonus looks so heavily taxed
The IRS treats bonuses as "supplemental wages." Most employers use the percentage method: a flat 22% federal withholding on bonuses up to $1 million (38% on anything above). On top of that come the normal FICA taxes — Social Security at 6.2% and Medicare at 1.45% — plus any state withholding. Stack those and a big chunk disappears at withholding.
A $10,000 bonus, line by line (2026)
| Bonus (gross) | $10,000 |
| Federal supplemental withholding (22%) | −$2,200 |
| Social Security + Medicare (7.65%) | −$765 |
| Take-home in a no-income-tax state | $7,035 |
| …minus a high state rate (≈9.3%, e.g. California) | ≈ $6,105 |
The part nobody tells you: withholding is not your final tax
That 22% is just an estimate the employer sends to the IRS. Your bonus is ultimately taxed at your real marginal rate, settled when you file. So:
- If your top tax bracket is below 22% (many people earning under ~$50k), too much was withheld — you get the difference back as a refund.
- If your bracket is 24% or higher, the 22% withholding was a little light, so the bonus effectively costs you a bit more at filing.
- FICA is final. Unlike income tax, the Social Security and Medicare on a bonus are not reconciled — that portion is gone for good.
Can you keep more of a bonus?
Two legitimate moves. First, route part of it into your traditional 401(k) or HSA — pre-tax contributions dodge income tax entirely (see how a 401(k) changes your take-home). Second, if your employer uses the "aggregate method" instead and over-withholds, fixing your W-4 can rebalance it. Either way, the headline rate on a bonus is a withholding artifact, not a penalty.
To see how your salary plus a bonus lands after taxes in your state, use the 2026 paycheck calculator.
Sources & methodology
The 22% supplemental withholding rate and FICA rates are set by the IRS for 2026. The example uses the percentage method; your employer may use the aggregate method, and the California figure is an illustrative withholding rate, not a final tax. Estimates only — not tax advice.