How Bonuses Are Taxed in 2026
A work bonus feels like a windfall — until you see the deductions. For federal withholding, the IRS treats bonuses as supplemental wages, and most employers apply the flat 22% supplemental rate (rising to 37% on any amount above $1 million in a year). On top of that come Social Security at 6.2%, Medicare at 1.45%, and state income tax where applicable.
Crucially, this is withholding, not your final tax bill. A bonus is ordinary income, so when you file your annual return it is taxed at your true marginal rate — if the flat 22% took more than you actually owe, the difference comes back as a refund. Diverting part of a bonus into a traditional 401(k) or HSA is a common way to defer the income tax.
Sources: IRS Publication 15 (supplemental wages), SSA.gov. Last updated July 29, 2026. Estimates only — not tax advice.
Frequently Asked Questions
How much is a bonus taxed in 2026?
Bonuses are usually withheld at the IRS flat supplemental rate of 22% for federal tax (37% on amounts over $1 million), plus 6.2% Social Security and 1.45% Medicare, plus any state tax.
Why was my bonus taxed so high?
Employers commonly use the flat 22% supplemental method for withholding, which can be more than your normal paycheck rate. If too much is withheld, you may get it back as a refund when you file.
Is a bonus taxed differently than salary?
It is withheld differently (often a flat 22%), but ultimately a bonus is ordinary income and is taxed at your normal marginal rate when you file your annual return.
How can I reduce tax on my bonus?
Contributing part of a bonus to a traditional 401(k) or HSA can defer income tax. Consult a tax professional about your options.