Bonus withholding guide
How Is Tax Withheld on a Bonus?
A bonus is taxable income, but the amount withheld from the check is not necessarily the tax you will ultimately owe. Here is how to review a bonus without relying on an outdated flat-rate assumption.
Short answer
Employers generally handle bonuses as supplemental wages. Depending on payroll circumstances, federal withholding may be calculated using a flat supplemental method or by combining the payment with regular wages. Either way, the bonus is included in your annual income and reconciled on your tax return.
Why older bonus searches can mislead
Searches such as “withholding on bonuses 2022” and “federal tax withholding on bonuses 2022” refer to an earlier tax year. The payroll method and current IRS guidance should be checked for the year of payment. The important planning question is whether your total withholding tracks your total annual tax, not whether the bonus check used a particular percentage.
How to check a bonus for underwithholding
- Include the bonus in your projected annual wages.
- Compare year-to-date federal withholding with your projected tax and safe-harbor target.
- Use W-4 Step 4(c) or estimated payments if the bonus creates a gap.
- Review state withholding separately because state supplemental rules differ.
Check your bonus withholding
Model bonus income alongside your paycheck, other jobs, RSUs, and safe-harbor payments.
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