Bonus tax rate 2026: why the IRS takes 22%
Federal withholding on a bonus is a flat 22% in 2026 for most people, because IRS rules let employers treat a bonus as "supplemental wages" and withhold at a single optional rate instead of running it through the paycheck tables. Above $1 million of supplemental wages in a calendar year, the rate becomes a mandatory 37%.
What the IRS says
"The withholding rate on supplemental wages remains 22% (37% if supplemental wages paid to an employee during the calendar year exceed $1 million) because P.L. 119-21 permanently extended the individual tax rates enacted in P.L. 115-97." — IRS Publication 15 (2026), What's New
Supplemental wages are pay that isn't regular wages: bonuses, commissions, overtime (if the employer chooses), accumulated sick-leave payouts, severance, awards, prizes, back pay and retroactive raises. The 22% figure is tied to the third-lowest income tax bracket rate, and because the 2025 law made the bracket rates permanent, the 22% and 37% rates no longer have an expiration date.
When an employer can use the flat 22%
Publication 15 gives two conditions. First, income tax must have been withheld from your regular wages in the current or the previous calendar year. Second, the bonus has to be paid separately, or combined with regular pay but listed as a separate amount. If both hold, the employer may choose either the flat 22% ("no other percentage allowed") or the aggregate method. If the bonus is lumped into a paycheck without being identified, it is simply withheld as part of that paycheck.
The flat rate ignores your W-4. Filing status, the two-jobs box, dependents and extra withholding requests all drop out — which is why a bonus can be withheld at 22% even if your regular paychecks sit in the 10% or 12% bracket. The aggregate method is the one that uses your W-4.
FICA comes on top, with its own limits
Income tax withholding is only part of the check. Every bonus also owes Social Security at 6.2% and Medicare at 1.45%, whichever income tax method the employer uses. Social Security stops once your wages for 2026 reach the $184,500 wage base, so a December bonus for a high earner may owe none. Medicare has no cap, and employers must add an extra 0.9% on wages above $200,000 in the calendar year, regardless of your filing status.
Federal withholding on common bonus sizes
For an employee earning $78,000 a year with year-to-date wages low enough that the Social Security cap doesn't bite, federal withholding and FICA on a flat-rate bonus look like this (no state tax — Texas):
| Bonus | Federal (22%) | Social Security | Medicare | Net check |
|---|---|---|---|---|
| $1,000.00 | $220.00 | $62.00 | $14.50 | $703.50 |
| $5,000.00 | $1,100.00 | $310.00 | $72.50 | $3,517.50 |
| $10,000.00 | $2,200.00 | $620.00 | $145.00 | $7,035.00 |
| $25,000.00 | $5,500.00 | $1,550.00 | $362.50 | $17,587.50 |
| $100,000.00 | $22,000.00 | $6,200.00 | $1,450.00 | $70,350.00 |
That is 29.65% withheld before any state tax. Your state's line is added on top; the state table shows each one.
The $1 million rule
Once your supplemental wages from one employer (including businesses under common control) pass $1 million for the year, everything above that is withheld at 37% "without regard to the employee's Form W-4." A single $1.5 million bonus to someone who already earned $400,000 in salary this year is withheld $405,000.00 in federal income tax — 22% on the first $1 million and 37% on the remaining $500,000 — plus $35,250.00 of Medicare and no Social Security, because the wage base was already reached. The million-dollar bonus guide covers state top tiers too.
22% is withholding, not your tax rate
The bonus is taxed as ordinary income on your return at whatever bracket your total income reaches. If your top bracket is 12%, 22% over-withholds and the excess returns as a refund; if it is 32% or more, 22% under-withholds and you owe the difference. Why your bonus was taxed so much shows how to estimate which side you'll land on.