Bonus Tax Calculator 2025 – How Bonuses Are Taxed (Flat 22% vs Aggregate)
Estimate your 2025 bonus paycheck after taxes. Understand the supplemental wage flat 22% method vs aggregate method, FICA, and state taxes with examples.
Bonus Tax Calculator 2025 – How Bonuses Are Taxed (Flat 22% vs Aggregate)
Introduction
Bonuses are taxed differently from regular paychecks. In 2025, employers can use the supplemental wage flat‑rate method or the aggregate method. This guide explains both approaches, shows how FICA and state taxes apply, and gives examples so you know what to expect from your bonus.
Two Bonus Tax Methods
1) Flat‑Rate (Supplemental Wage) Method
- Federal withholding at a flat 22% on bonuses up to $1,000,000
- Amounts above $1,000,000 are withheld at 37%
- Social Security and Medicare (FICA) still apply up to annual wage bases
- State/local taxes may apply depending on your location
2) Aggregate Method
- Bonus is added to your most recent regular paycheck
- Employer calculates withholding as if you earned that combined amount regularly
- Can result in higher or lower federal withholding than 22%, depending on bracket
What Else Affects Your Net Bonus
- Social Security (6.2%) up to the annual wage base (illustrative)
- Medicare (1.45%) with additional 0.9% at higher incomes
- State/local income tax rules (some states have flat rates; some have none)
- 401(k)/HSA contributions if allowed on bonus payroll
Examples (Illustrative)
Example A: $5,000 Bonus, Flat‑Rate Method
- Federal: 22% → $1,100
- FICA (approx): 7.65% → $383
- State (5%): $250
- Net bonus: ≈ $3,267
Example B: $15,000 Bonus, Aggregate Method
- Added to one paycheck → pushes top portion into a higher bracket
- Federal withholding could exceed 22% depending on annualized rate
- Compare both methods if your employer offers options
Optimization Tips
- Ask HR which method your company uses for bonuses
- Increase 401(k)/HSA contributions on bonus payroll to reduce taxable income (if allowed)
- Adjust W‑4 withholding if you expect a large bonus to avoid surprises
- Plan for state/local taxes and any local supplemental wage rules
FAQ
Q: Why does my bonus feel taxed higher?
A: The 22% flat method plus FICA and state taxes can make withholding look high, but your annual tax is settled on your return.
Q: Can I change my bonus tax method?
A: Typically no; employers choose the method. You can adjust W‑4 or pre‑tax contributions instead.
Q: Should I withhold extra for a big bonus?
A: Consider it if you regularly owe at tax time, or use estimated payments.
Related Calculators and Guides
- Take‑Home Pay Calculator 2025: /calculator
- Tax Bracket Calculator 2025: /calculator
- 401(k) Contribution Calculator 2025: /calculator/retirement
CTA: Estimate Your Net Bonus
Use the calculator to compare flat‑rate vs aggregate withholding and preview your after‑tax bonus in minutes.