How bonus withholding works
Employers can withhold federal income tax on supplemental wages such as bonuses using more than one approach. The simplest common approach is the percentage method, which applies a flat withholding rate to eligible supplemental wages up to the threshold and a higher rate above that threshold. Another approach is the aggregate method, which combines regular wages and the bonus for payroll withholding purposes.
That distinction matters because a bonus is often withheld differently from regular salary even when the year-end tax result is reconciled on the tax return later. A withholding estimate is therefore most useful when you want to preview the pay-period impact rather than predict an exact final tax liability.
Net bonus = Bonus amount - Federal withholding - Employee payroll taxes
This calculator shows the estimated cash left after federal income-tax withholding plus employee Social Security and Medicare withholding.
Percentage method withholding = Bonus x flat rate
The IRS percentage method generally uses a flat supplemental-wage rate up to the annual threshold, with a higher rate on the excess.