Bonus Tax Rate 2026: 22% Federal Withholding, What You Really Owe, Calculator
In 2026 an employer that pays a bonus separately from your regular pay may withhold a flat 22% federal income tax, and must withhold 37% on supplemental wages above $1 million in the year; it may instead withhold on the bonus and your regular pay together as one payment (the aggregate method) (IRS Publication 15, section 7). That is only withholding. The tax you owe on a bonus is your bracket rate on it, plus 7.65% Social Security and Medicare tax and any state tax — the calculator works out both. The same rules apply to commissions and to RSUs and restricted stock when they vest. Unchanged from 2025.
How a 2026 bonus is withheld
| Situation | Withholding |
|---|---|
| Bonus paid separately (or its amount specified), regular pay withheld this year or last | Flat 22%, or the aggregate method (employer’s choice) |
| Bonus mixed into regular pay without a separate amount | As one payment for the pay period (the regular tables) |
| Supplemental wages above $1 million in the calendar year | 37% on the excess, mandatory, whatever the W-4 says |
| No income tax withheld from regular pay this year or last | Aggregate method only |
| Social Security and Medicare (FICA) | 7.65% on every bonus, up to the wage base for Social Security (IRC §3101) |
Bonus tax calculator: withheld vs owed
Withholding assumes a 2020-or-later W-4 with nothing in Steps 2-4 and the bonus paid in a regular pay period. “Owed” is the change in your 2026 federal income tax (standard deduction, the bonus as wages), Social Security and Medicare tax, and state income tax.
Worked examples: is 22% enough?
| Pay | Withheld, flat 22% | Withheld, aggregate | Federal tax owed | FICA | CA tax |
|---|---|---|---|---|---|
| $60,000 salary + $5,000 bonus | $1,100 | $1,127 | $600 | $383 | $300 |
| $150,000 salary + $30,000 bonus | $6,600 | $10,360 | $7,200 | $2,295 | $2,790 |
At $60,000 the bonus lands in the 12% bracket: the flat 22% withholds $1,100 against $600 owed, and the difference comes back as part of the refund. At $150,000 it lands in the 24% bracket: $7,200 owed against $6,600 withheld, so tax is still due when you file.
RSUs, restricted shares and an IPO
When restricted stock or RSUs vest, their value is wages on your W-2 for that year (Publication 525). Withholding is usually the 22% supplemental rate, taken by keeping back shares. If the company goes public and years of grants vest together, the income can push you into the 32%, 35% or 37% bracket while 22% was withheld; the 37% rate applies only to the part of the year’s supplemental wages above $1 million. Your basis in the shares is the value taxed as wages, so selling right away produces little or no extra gain — see cost basis.
An estimate from QuantCalc’s open tax engine (federal 2.6.0, state 1.26.0) for the 2026 tax year. Not tax advice: your return depends on facts this page does not ask about, so check a move with your tax preparer or custodian before acting. How the engine computes each line, with its official source: federal, state.
Putting the bonus toward retirement? QuantCalc runs your whole retirement — savings, withdrawals, taxes and Medicare surcharges — year by year, free.
Run the free tax-aware simulation →Common questions
- What is the federal tax rate on a bonus in 2026?
- There is no separate tax rate on a bonus: it is wages, taxed at your ordinary bracket rates when you file. What differs is the WITHHOLDING. An employer that pays the bonus separately may withhold a flat 22%, and must withhold 37% on supplemental wages above $1 million in the year (IRS Publication 15, section 7). Social Security and Medicare tax (7.65% up to the wage base) also apply.
- Is 22% enough withholding on my bonus?
- It depends on your bracket. A single filer earning $60,000 owes $600 of federal income tax on a $5,000 bonus (the 12% bracket), so 22% ($1,100) over-withholds; at $150,000 a $30,000 bonus costs $7,200 (the 24% bracket), so 22% ($6,600) leaves tax to pay in April. Raise your W-4 Step 4(c) amount to cover a gap.
- How are RSUs and restricted stock taxed?
- Restricted stock and RSUs are compensation: the fair market value when the shares vest (or are delivered), minus anything you paid, is wages for that year, and your holding period starts then (IRS Publication 525). Employers usually withhold on vesting income at the 22% supplemental rate, often by selling or holding back shares (sell-to-cover). When a company goes public and a large block vests at once, 22% can be well under the tax at a 32%-37% bracket.
- Is a commission check taxed like a bonus?
- Yes. Commissions are supplemental wages under the same rules: the flat 22% if paid separately, or withheld together with regular pay as one payment (Publication 15). The tax owed for the year does not depend on which method the employer used.
- Did the bonus withholding rate change from 2025 to 2026?
- No. The rate remains 22% (37% over $1 million) because P.L. 119-21 made the individual tax rates permanent (Publication 15 (2026)).