Are bonuses taxed at a higher rate?
A bonus is withheld differently, not taxed differently. What the flat supplemental rate does to your pay, and why the return settles the difference in April.
Quick answers
- Is a bonus taxed differently from regular pay?
- No. A bonus is ordinary income taxed at the same rates as your salary. What differs is withholding: employers may use a single flat rate on a bonus instead of the tables they use on a regular paycheck.
- Will I get the extra bonus withholding back?
- If more was withheld than your actual tax on the bonus, yes, it comes back through the return as a larger refund or a smaller balance. The return settles the difference either way.
- How can I tell which method my employer used?
- Look at the pay stub. Withholding that is a flat share of the bonus alone points to the supplemental rate. A much larger, uneven amount usually means the bonus was added to regular pay and run through the normal tables.
A bonus is taxed at exactly the same rates as the rest of your pay. What is different is withholding, and the return settles the difference either way.
| Flat withholding rate on supplemental wages | 22% | Publication 15 (2025), section 7, Supplemental Wages |
|---|---|---|
| Withholding rate on supplemental wages above the annual threshold | 37% | Publication 15 (2025), section 7, Supplemental Wages |
| Supplemental wages in a year above which the higher withholding rate applies | $1,000,000 | Publication 15 (2025), section 7, Supplemental Wages |
Withholding is not tax
Withholding is a prepayment. Your employer estimates the tax on what it pays you and sends that money to the IRS on your behalf during the year; the tax itself is worked out once, on the return, across everything you earned. How refunds work is the same idea from the other end, and Form W-4 is the form that steers the estimate.
So a bonus that arrives with a third of it missing has not been taxed at a third. It has been prepaid at a third. If that was more than the tax on it turns out to be, the excess comes back through the return.
The flat supplemental rate
A bonus is a supplemental wage, which is the payroll term for money outside the regular payroll period. When an employer identifies it separately from regular wages, it may withhold on the bonus at a single flat rate of 22%, and no other percentage is allowed under that method.
The method is not always open to the employer. It may be used only where income tax was withheld from your regular wages in the current or the preceding calendar year; where it was not, the bonus has to be combined with regular wages and run through the ordinary tables instead.
There is one step above it. Once the supplemental wages an employer has paid you during the calendar year pass $1,000,000, the excess is withheld at 37%, regardless of what your Form W-4 says. Very few employees ever reach that line.
The aggregate method
The alternative is to fold the bonus into a regular paycheck and withhold on the combined amount as though it were normal pay for that period. The payroll tables are built to annualize: a paycheck five times your usual size reads to them as a salary five times your usual salary, so they withhold at the rate that salary would deserve.
That is the method behind most alarming stubs. Nothing has gone wrong, and the tables correct themselves over the rest of the year because each later paycheck is small by comparison.
Which one your employer used
The pay stub usually tells you, though this is a practical test rather than an IRS rule. Withholding that comes to a clean twenty-two percent of the bonus alone, with the regular pay withheld as usual beside it, points to the flat method. A single much larger, uneven amount covering the whole paycheck generally means the bonus went through the tables with your salary.
"The bonus put me in a higher bracket"
Brackets tax layers of income, not the whole of it. If the bonus pushes your taxable income past the top of the twenty-two percent band at $103,350 for a single filer, only the part above that line is taxed at twenty-four percent, and that next band runs all the way to $197,300. Everything underneath keeps the rate it already had.
That is why the rate tables alone never make a bonus cost you money. Credits and subsidies that phase out with income are a separate question, and Will a raise push me into a higher bracket works both through in full.
What actually decides your tax on the bonus
Your total income for the year and the rate that applies to your last dollar of it. The withholding method decides only how much was prepaid, and the two rarely match.
If the flat rate came out below your marginal rate, you will owe a little on the bonus in April. If it came out above, the difference comes back. Someone whose income sits in the twelve percent band usually has too much taken from a bonus; someone in the thirty-two percent band usually has too little.
Social Security and Medicare come out too
A bonus is wages, so payroll tax applies to it as it does to any pay. The Social Security part comes out until your wages for the year reach the wage base of $176,100, after which it stops. The Medicare part has no ceiling and continues on every dollar.
This is part of why the total taken from a bonus looks so steep. Income tax withholding, Social Security, Medicare, state tax and any deduction that runs as a percentage of pay all come out of the same paycheck at once.
What to do if this repeats
If bonuses are a regular part of how you are paid, the fix belongs on the regular paycheck rather than on the bonus. Withholding for the year is what the return compares against, so raising or lowering it a little each period is easier than arguing with payroll about one payment.
Run the IRS withholding estimator with the bonus included in your expected pay, then adjust Form W-4 once. A withholding checkup for 2026 covers when to do it and what to change.