Massachusetts Bonus Tax Calculator 2026

5% — and 9% at the top

Circular M, the Department of Revenue's withholding tables at 5.0% effective January 1, 2026, handles bonuses in section G of its percentage methods for "Supplemental Wage Payments (e.g., Bonuses)." For almost everyone, Massachusetts withholds 5% of the bonus: $250.00 on $5,000, $1,000.00 on $20,000. The tables were "updated to include 4% Surtax," which Massachusetts levies on income over a threshold that is $1,107,750 for 2026 after inflation adjustment.

How the surtax test works

Section G adds the bonus to the employee's annualized regular wages from the same employer (less up to $2,000 of Social Security, Medicare or retirement-system contributions and the employee's exemption factors) and to any earlier bonuses this year. If the total stays at or under $1,107,750, the bonus is withheld at 5%. If it goes over, the part above the threshold is withheld at 9% and the rest at 5%, never more than 9% of the bonus.

The Department's own example: an employee earning $948,000 a year ($79,000 a month), one exemption, receives a $350,000 bonus. Step 4 totals $1,291,600, so $183,850 is withheld at 9% and $166,150 at 5% — $24,854. Entered here, the same facts produce $24,854.00.

Exemptions on Form M-4

Exemption factors only enter the surtax test. With one exemption the annual factor is $4,400; each additional exemption adds $1,000 on top of $3,400. For a bonus well below the threshold they make no difference.