1. What is Bonus Payroll Tax?

Bonus payroll tax refers to the mandatory withholding applied to bonus payments. In 2025, the standard withholding rate for supplemental wages like bonuses is 22% for federal income tax purposes.

2. How Does the Calculator Work?

The calculator uses the bonus tax formula:

Where:

• \( Bonus \) — The gross bonus amount in dollars
• \( 22\% \) — The standard withholding rate for supplemental wages

Explanation: The calculator multiplies the bonus amount by 0.22 (22%) to determine the tax withholding amount, then subtracts this from the gross bonus to calculate the net amount.

3. Importance of Bonus Tax Calculation

Details: Accurate bonus tax calculation ensures proper withholding compliance with IRS regulations, helps employees understand their take-home pay, and assists employers in meeting their tax obligations.

4. Using the Calculator

Tips: Enter the gross bonus amount in dollars. The calculator will automatically compute the 22% withholding tax and the resulting net amount you'll receive.

5. Frequently Asked Questions (FAQ)

Q1: Is the bonus tax rate always 22%?
A: For most employees, the supplemental tax rate is 22%. However, if your bonus exceeds $1 million, the excess amount is taxed at 37%.

Q2: Are state taxes also withheld from bonuses?
A: Yes, most states also withhold state income tax from bonus payments at their respective supplemental tax rates.

Q3: Can I adjust my bonus withholding?
A: You may be able to adjust withholding by submitting a new W-4 form to your employer, but the default supplemental rate applies unless specific conditions are met.

Q4: How is bonus taxation different from regular paycheck taxation?
A: Bonuses are considered supplemental wages and are typically taxed at a flat rate, whereas regular wages use progressive tax brackets with standard withholding.

Q5: When are bonus taxes due?
A: Employers must withhold bonus taxes when the payment is made and remit them according to regular payroll tax schedules.