How bonuses are taxed: the 22% withholding rule

Where the 22% comes from

A bonus is supplemental wages, the same tax category as RSU vests, commissions, severance, and back pay. IRS Pub 15 gives your employer two ways to withhold federal income tax on it[1]:

1. The flat-rate method. When the bonus is paid separately from regular wages (or identified separately), the employer may withhold a straight 22%, whatever bracket you are actually in. Above $1 million of supplemental wages in a calendar year, withholding on the excess is a mandatory 37%, not optional[3].
2. The aggregate method. The employer adds the bonus to your regular wages for that pay period and withholds on the total as if that were your pay every period, annualized through the Pub 15-T percentage-method tables. One big check gets treated like your new normal, so the withholding rate spikes.

Payroll footnote: Social Security and Medicare on the bonus are withheld separately on the paycheck. Everything below is the federal income-tax slice only.

Who gets a refund, who owes: the breakpoint

The flat 22% happens to equal the third tax bracket, the 22% bracket. While your income sits inside that bracket, the flat rate covers the bonus exactly. Below it, the bonus is over-withheld and money comes back at filing. Above it, every bonus dollar is under-withheld.

For 2026, the boundaries in salary terms (standard deduction, bonus small enough to stay inside one bracket)[4]:

The refund side is real money. A single filer with a $60,000 salary and a $15,000 bonus is withheld $3,300 and owes only $2,650: $650 back at filing, because $6,500 of the bonus sat in the 12% bracket. A married couple with $100,000 of household salary and a $20,000 bonus is withheld $4,400 and owes $2,400: $2,000 back, an effective 12% rate on the bonus.

The owing side starts quietly. Past the breakpoint, the shortfall is 2 cents per bonus dollar (24% bracket), then 10 cents (32%), 13 cents (35%), and 15 cents (37%). A single filer does not hit the 13-cent rate until salary passes about $272,325; the full cents-per-dollar ladder is in the RSU withholding gap index (in preparation), whose math is identical for bonuses.

How big the gap gets

Verified cells, $40,000 bonus, gap in dollars after the flat 22% withholding:

Read the $180,000 row as the typical senior-role case: the bonus stacks from the 24% bracket into 32% ($37,875 at 24%, $2,125 at 32%), so the true tax is $9,770, an effective 24.4% on the bonus, against $8,800 withheld. The gap is $970, 2.4% of the bonus. At a $300,000 salary the whole bonus lands in the 35% bracket and the gap is a flat 13 cents on the dollar: $5,200 on $40,000.

The marriage asymmetry is the same one the RSU guides document: filing jointly roughly doubles every bracket width, so the same bonus sits much lower in the schedule.

The other method: why a bonus can look over-taxed

If your check showed far more than 22% coming out, your employer used the aggregate method. A one-time spike gets taxed like a permanent raise.

Worked example (modeled per Pub 15-T's percentage method for automated payroll systems, monthly pay, W-4 with no adjustments; manual model on the engine's bracket schedule, not engine-executed)[2]: single filer, $180,000 salary paid monthly ($15,000 a month), a $40,000 bonus in one check. The combined $55,000 check annualizes to $660,000, so the withholding tables treat the month as if it came from a $660,000 job. Withholding attributable to the bonus comes out to about $13,522, versus $8,800 under the flat-22% method and a true April cost of $9,770. The aggregate method over-withheld by roughly $3,752; that money comes back as a larger refund.

The method is the employer's choice, not yours, but knowing which one your payroll uses tells you whether to expect a bill or a refund.

Over $1 million, withholding is mandatory at 37%

Once your supplemental wages pass $1 million in a calendar year, withholding on the excess is a mandatory 37%, not 22%[1][3]. That helps, but the first million is still withheld at 22%, and the first million does the damage.

A $1,200,000 bonus year with a $120,000 salary, single: withholding is $220,000 on the first million plus $74,000 on the excess, $294,000 total. The true income-tax slice on the bonus is $420,830, a 35.1% blended rate, because the bonus fills every bracket from 22% up before living in 37%. Gap: $126,830, even after the corrective rate kicked in.

Bonuses and RSU vests stack on the same year

Vests and bonuses are both supplemental wages, both withheld at the flat 22%, and both stack on salary and on each other: each payment looks handled because 22% came out, and each successive payment stacks higher than the last. In the RSU guides' four-vest year at a $180,000 salary, the same mechanism compounds from a $720 gap on the first vest to $12,920 across the year.

If you have both, run the vest side with the RSU withholding-gap calculator → and treat your bonus as one more vest-sized payment in the same stack. The full mechanism: Why the 22% RSU withholding falls short → · the complete reference: RSU tax guide →.

Closing the gap

The fix is the same lever as for vests, detailed in the RSU guides: raise your W-4 withholding (treated as paid evenly all year, the best safe-harbor lever), make quarterly estimated payments, or set aside the difference when the bonus lands. For the $970 gap on a $40,000 bonus: $81 a month across the year, or about $37 per biweekly paycheck. Whether an unclosed gap draws a penalty depends on the §6654 safe harbors[5]; the mechanics live in the estimated taxes and safe harbors guide → and the underpayment-penalty check → sizes your own exposure.

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