The short answer
Your bonus is taxed at your marginal federal tax rate — the rate that applies to your highest dollar of income. Most middle-income earners pay 22-24% federal on their bonus, plus state tax and payroll taxes.
Example: $10,000 bonus on a $60,000 salary in California
Federal tax on bonus: ~$2,200 (22% marginal rate)
California state tax: ~$700 (7% rate)
Social Security: $620 (6.2%)
Medicare: $145 (1.45%)
You keep: ~$6,335 (63.4% of bonus)
Federal tax on bonus: ~$2,200 (22% marginal rate)
California state tax: ~$700 (7% rate)
Social Security: $620 (6.2%)
Medicare: $145 (1.45%)
You keep: ~$6,335 (63.4% of bonus)
Federal bonus tax rates by income (2024)
| Salary range (single) | Marginal rate | $10k bonus — you keep |
|---|---|---|
| $0 – $47,150 | 12% | ~$7,800 |
| $47,150 – $100,525 | 22% | ~$6,900 |
| $100,525 – $191,950 | 24% | ~$6,700 |
| $191,950 – $243,725 | 32% | ~$5,900 |
| $243,725 – $609,350 | 35% | ~$5,600 |
| $609,350+ | 37% | ~$5,400 |
Note: These are federal rates only. Add state tax for your state.
The aggregate method explained
The IRS requires employers to withhold taxes on bonuses using the aggregate method: your bonus is combined with your regular salary, and taxes are calculated on the total — then the taxes already withheld from your salary are subtracted.
Some employers use the simpler flat rate method (22% federal withholding on bonuses under $1M), but you still owe your actual marginal rate at tax time.
State bonus tax by state
| State | State tax on $10k bonus | You keep (federal + state) |
|---|---|---|
| Texas / Florida / Nevada | $0 | ~$7,100 |
| New York | ~$700 | ~$6,400 |
| California | ~$700 | ~$6,400 |
| Illinois | ~$500 | ~$6,600 |
💡 Tip: Negotiate your bonus structure
If you have flexibility, ask your employer to pay part of your bonus as a 401k contribution — it reduces your taxable income dollar-for-dollar and saves you the full marginal rate in taxes.
If you have flexibility, ask your employer to pay part of your bonus as a 401k contribution — it reduces your taxable income dollar-for-dollar and saves you the full marginal rate in taxes.
Can I reduce bonus tax?
- Contribute to 401k: Defer salary to reduce the income base
- HSA contribution: Reduce AGI by up to $3,850 (single)
- Traditional IRA: Up to $7,000 deductible if eligible
- Time it right: If you expect lower income next year, defer bonus to January
Calculate your exact bonus tax
Enter your salary and bonus amount — see exactly what you keep after all taxes.
Open Bonus Calculator →