How Are Bonuses Taxed? Rate and Withholding (2026)
By Apex Reign · Published on 2026-06-30
Your Bonus Is Not Taxed at a Higher Rate
Bonuses are taxed as ordinary income. The IRS allows flat 22% withholding for bonuses under $1 million. For a $5,000 bonus, that is $1,100 withheld. At tax time, if your marginal rate is 24%, you owe $100 more; if 12%, you get $500 back.
Use our paycheck calculator to model bonus scenarios.
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