The first time most people see a bonus check, the reaction is the same: where did a third of it go? Bonuses, commissions and other supplemental wages follow different withholding mechanics than regular pay, and the default feels brutal.
The flat 22% method
When your employer pays a bonus separately from regular wages, the default federal withholding is a flat 22% — regardless of your bracket. Add Social Security at 6.2%, Medicare at 1.45%, and your state's supplemental rate, and a $5,000 bonus can easily land as $3,200. It looks like punishment. It is actually just an estimate.
The key word is "withholding." At filing time, your bonus is added to your regular income and taxed at your real marginal rate. If you are in the 12% bracket, the 22% withheld was too much and the difference comes back as part of your refund. If you are in the 32% bracket, 22% was not enough.
When 22% is genuinely wrong for you
- Lower brackets: you will get it back, but if you would rather not wait, a W-4 adjustment can smooth it.
- Higher brackets: a big bonus withheld at 22% can leave you underpaid for the year — the calculator's bonus mode shows the gap before April does.
- Bonuses over $1 million: the excess is withheld at 37%, automatically.
Try it before your next bonus lands
Enter your salary, then add the bonus in the calculator's bonus field. You will see the flat-rate withholding broken out from your regular wages — and, more usefully, what the bonus does to your annual total tax once the return reconciles everything.