How Bonus Taxes Work in the US (Flat vs Aggregate Withholding)
A bonus check can feel confusing because the taxes often look higher than your normal paycheck. That’s usually because bonuses are treated as supplemental wages, and employers may withhold using a special method.
1) Flat Method (Most Common for Separate Bonus Checks)
With the flat method, your payroll may withhold a fixed federal percentage on the bonus. If your employer pays bonuses separately from your regular wages, this is a common approach.
2) Aggregate Method (Bonus Added to Regular Pay)
With the aggregate method, your bonus is added to your regular pay for that pay period, and withholding is calculated from your payroll settings. This can sometimes withhold more (or less) depending on your situation.
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Frequently Asked Questions
1) Why is my bonus taxed higher than my normal paycheck?
Often, it’s not “taxed higher” overall — it’s withheld differently. Your final tax depends on your total annual income.
2) Which method should I choose here?
If your employer pays a separate bonus check, try Flat. If your bonus is added to a normal paycheck, try Aggregate.
3) Does this include Social Security and Medicare?
Yes, you can include/disable them, and you can enter year-to-date wages to estimate whether Social Security may be capped.
4) What about local/city taxes?
This calculator focuses on federal + optional state + payroll taxes. If you have city/local taxes, include them in “state rate” or treat them as post-tax deductions.
5) Is this the exact amount I’ll receive?
It’s an estimate. Payroll settings, benefit rules, and employer policies can change the final check.