Why a bonus may look heavily taxed
Payroll withholding is not the same as final annual tax liability. A separately identified bonus may use the optional 22% federal supplemental-wage rate when the employer qualifies, while Social Security and Medicare are calculated separately.
Supported method
The calculator supports the aggregate method and the optional 22% method for separately identified supplemental wages up to $1 million. The excess over $1 million uses the mandatory 37% rate. Employer-specific eligibility is an assumption.
Bonus withholding example
A separately identified $5,000 bonus may use the optional 22% federal supplemental-wage method when the employer qualifies, producing $1,100 of federal withholding before Social Security and Medicare. Withholding is not final tax liability.
Frequently asked questions
Are bonuses taxed differently in Florida?
Florida adds no individual state income tax, but a bonus remains subject to applicable federal withholding and employee payroll taxes.
Why can bonus withholding look high?
Payroll may use a supplemental-wage method, and Social Security and Medicare are separate from federal income-tax withholding.
What is the 22% bonus method?
For a qualifying separately identified supplemental payment up to $1 million, an employer may use the optional flat 22% federal withholding method under the supported 2026 rules.
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