A bonus feels like free money until the check arrives smaller than expected. The reason is how withholding works: your employer has to guess the tax, and the guess for bonuses is blunt. The final tax you owe is figured the same way as for the rest of your pay.
How employers withhold on a bonus
Most employers use the flat percentage method for bonuses, which means 22% federal income tax withholding on supplemental wages up to $1 million (37% above that). On top of that, Social Security (6.2%) and Medicare (1.45%) apply, plus any state income tax. Some employers instead add the bonus to your regular pay and use the normal tables, which can withhold more or less.
Withholding is not the final tax
The 22% is only an advance payment. The real tax depends on your total income for the year and your tax bracket when you file. If you are in the 12% bracket, too much was withheld and you get the difference back as part of your refund. If you are in the 24% bracket or higher, too little may have been withheld.
What you keep: an example
For a single filer earning $75,000 in a state with no income tax (Texas), this is what bonuses of different sizes leave you after federal tax and FICA:
| Bonus | Typical withholding (22% + FICA) | Actual extra tax | You keep | Share kept |
|---|---|---|---|---|
| $1,000 | $297 | $297 | $704 | 70% |
| $5,000 | $1,483 | $1,483 | $3,518 | 70% |
| $10,000 | $2,965 | $2,965 | $7,035 | 70% |
| $25,000 | $7,413 | $7,413 | $17,588 | 70% |
At $75,000 a single filer is in the 22% federal bracket, so the flat withholding rate happens to match the real tax. For someone in the 12% bracket the withholding is too high, and for someone in the 24% bracket it is too low.
In California the same $10,000 raise to a $75,000 salary adds only about $6,054 to take-home pay, because state income tax also applies.
Ways to keep more of a bonus
- Put part of it in a 401(k). Contributions reduce taxable income, subject to the annual limit.
- Adjust your W-4. If you often get bonuses, check that your withholding matches your real tax. See Form W-4 explained.
- Do not judge the check. Compare the real tax on your whole year rather than the bonus alone.
Want the full picture? Read how the 2026 tax brackets work.
Try the take-home pay calculator to see your own numbers, or pick your state from the state list.