Your Bonus Is Not Your Bonus: What Supplemental Withholding Really Takes

$10,000 bonus. You expect roughly $7,800 to land in your account. Instead you see something closer to $7,067.50. That gap isn't a mistake, and it isn't your marginal tax bracket either. It's the IRS supplemental wage flat withholding rate, and it applies whether you're a $45,000 earner or a $250,000 earner.

What supplemental withholding actually is

Bonuses, commissions, severance, and other one-time payments aren't taxed under the same withholding tables as your regular paycheck. Instead, your employer has the option to withhold federal income tax at a flat 22% on bonus payments up to $1,000,000, per IRS Publication 15-T (2026). That flat rate has nothing to do with your actual tax bracket. If your regular income tax bracket is 12% or 24%, the 22% flat rate can overshoot or undershoot what you actually owe. You settle the difference when you file your return.

Once a supplemental payment (or the cumulative supplemental payments in a year) exceeds $1,000,000, the rate jumps: the mandatory withholding rate above that $1,000,000 threshold is 37%, per the same IRS guidance. That's a payroll rule for a narrow slice of earners, but it explains why executive bonus checks look brutal on paper.

Here's the part most people miss: federal income tax withholding is only one line. FICA still applies to your bonus in full, the same way it applies to your regular wages. That means Social Security at 6.2% and Medicare at 1.45%, per IRS Topic No. 751, come out of your bonus too, on top of the 22% flat federal withholding.

The worked example: $10,000 gross bonus

Assume you haven't hit the Social Security wage base yet this year. Here's what a $10,000 bonus actually loses before it hits your account:

• Federal supplemental withholding: 22% × $10,000 = $2,200.00
• Social Security: 6.2% × $10,000 = $620.00
• Medicare: 1.45% × $10,000 = $145.00

Total withheld: $2,965.00. Take-home on the bonus: $7,035.00.

That's before any state income tax, which is a separate calculation and outside what this guide covers. It's also before any pre-tax deductions your employer might apply to the bonus check, which vary by plan and aren't something we can generalize here.

One more wrinkle worth naming: the 6.2% Social Security tax only applies up to the Social Security wage base, $184,500 for tax year 2026, per the SSA contribution and benefit base. If your bonus lands after you've already crossed that threshold for the year, Social Security won't be withheld on it at all — only Medicare will. If you're a high earner, you may also owe the Additional Medicare Tax rate of 0.9% once your total wages for the year cross $200,000, per Form 8959 instructions. Your employer starts withholding that extra 0.9% automatically once your wages from that employer pass $200,000, regardless of your bonus timing.

Why the flat rate rarely matches your real bracket

The 22% supplemental rate is a withholding convenience, not a final tax bill. If your actual marginal federal income tax bracket is lower than 22%, you're over-withheld on the bonus and you'll get some of it back as part of your refund. If your bracket is higher, you're under-withheld and you'll owe more at filing. Either way, the number on your bonus stub is not the number you'll ultimately pay in income tax for the year — it's a placeholder the IRS sets so employers have one flat rate to apply, rather than trying to guess your annual bracket paycheck by paycheck.

This is also why a $10,000 bonus at a 24% marginal bracket and a $10,000 bonus at a 12% marginal bracket both get the same 22% federal withholding on the check itself. The FICA piece — 6.2% Social Security and 1.45% Medicare — doesn't change based on your bracket either. It's flat for everyone below the Social Security wage base, full stop.

To see your own numbers instead of the $10,000 example above, run your actual bonus amount through the bonus take-home calculator. It applies the 22% supplemental federal rate along with Social Security and Medicare, and shows you the FICA breakdown line by line, so you know exactly what's federal withholding versus what's FICA before your check even arrives.

If you're also trying to figure out how a bonus interacts with your regular paycheck deductions, like pre-tax health insurance or FSA contributions, our guide on which pre-tax benefits actually lower your FICA-taxable wages walks through exactly which deductions count and which don't. And if the bonus pushes you past the point where Social Security stops being withheld for the year, our guide on why a percentage raise feels smaller than it should covers the same FICA math that applies here.

What this guide doesn't cover

This is FICA and federal supplemental withholding only. State income tax withholding on bonuses is a separate calculation that varies by state, and it's out of scope here — CiteTax covers that ground. We're also not a payroll service and we can't speak to employer-specific bonus plan rules, like whether your company defers bonus payment or splits it across pay periods.

Frequently asked questions

Is the 22% bonus withholding rate my actual tax rate?

No. It's a flat federal withholding rate set by the IRS for supplemental wages up to $1,000,000, per Publication 15-T. Your actual tax liability depends on your total annual income and marginal bracket, and any difference between the 22% withheld and what you actually owe gets reconciled when you file your return.

Does Social Security get withheld from my bonus?

Yes, at the standard 6.2% rate, the same as your regular paycheck, unless you've already earned above the Social Security wage base ($184,500 for 2026) for the year. Once you cross that threshold, Social Security withholding stops for the rest of the year, including on bonus payments.

What happens if my bonus is over $1,000,000?

The portion above $1,000,000 is withheld at a mandatory 37% federal rate, per IRS Publication 15-T. This only applies at that threshold; bonuses below $1,000,000 are withheld at the standard 22% flat rate.

Does my employer have to withhold state tax on my bonus too?

Most states do apply their own withholding rules to supplemental wages, but the specific rate and method vary by state and fall outside FICA and federal withholding, which is what we cover here.

Why does my bonus check feel more heavily taxed than my regular paycheck?

Because it is withheld differently, not because it's taxed at a higher final rate. The flat 22% supplemental rate is often higher than what many earners' marginal bracket works out to, so the check feels lighter even though the withholding is just an upfront estimate, not your final tax bill.

Informational only, not financial or tax advice. Written by Eric, StubTrue founder.

This guide is for informational and educational purposes only. It is not financial, tax, or legal advice. Tax rules are complex and subject to change. Consult a qualified professional before making financial decisions based on this content.

Last reviewed: September 2026 · Source: IRS Publication 15, SSA.gov.