Why Your Bonus Check Is Smaller Than Expected
4 min read · Updated for 2026
You earned a $5,000 bonus and expected to pocket most of it — then you saw the actual deposit. Nearly 30% vanished before you ever touched it. Here's exactly why that happens, and why the tax hit at filing time may not be as bad as your pay stub makes it look.
The Supplemental Wage Withholding Rate
The IRS classifies bonuses as supplemental wages, and employers are allowed (and usually required) to withhold federal income tax on them at a flat 22% — regardless of your actual marginal tax bracket. This is called the flat-rate method, and it's the most common approach.
The 22% is a withholding rate, not your final tax. When you file your return, the IRS calculates your actual liability based on your total income and bracket. If your marginal rate is lower than 22%, you'll likely get a refund on the over-withheld amount. If your marginal rate is higher than 22% (income above $103,350 for single filers in 2026), you may owe a bit more.
On top of federal withholding, your bonus is subject to the same FICA taxes as regular wages: 6.2% Social Security and 1.45% Medicare. That adds 7.65% to the withholding total, bringing the combined federal bite to roughly 29.65% before any state taxes.
What a $5,000 Bonus Actually Looks Like
Using real 2026 withholding rates, here's how a $5,000 bonus pays out across several states:
| Deduction | Texas (no state tax) | California (~10.23%) |
|---|---|---|
| Gross bonus | $5,000.00 | $5,000.00 |
| Federal income tax (22%) | −$1,100.00 | −$1,100.00 |
| Social Security (6.2%) | −$310.00 | −$310.00 |
| Medicare (1.45%) | −$72.50 | −$72.50 |
| State income tax | $0.00 | −$511.50 |
| Take-home | $3,517.50 | $3,006.00 |
California uses a flat 10.23% supplemental withholding rate for bonus payments. Actual state rates vary; this example shows the withholding rate, not necessarily your final CA tax liability.
Flat Rate vs Aggregate Method
Not every employer uses the 22% flat rate. Some use the aggregate method, where the bonus is added to your most recent regular paycheck and the combined amount is run through normal withholding tables as if that were a standard paycheck.
If your regular paycheck already puts you in a high withholding tier, the aggregate method can result in even more federal withholding than the flat 22% — because the combined amount pushes the effective withholding rate higher. Employees who get large bonuses relative to their salary can sometimes see 30–35% federal withholding under the aggregate method.
What Happens at Tax Filing Time
The withholding on your bonus is just a prepayment of your annual tax bill — not the final number. When you file your return, the IRS looks at your total income for the year (salary + bonus + any other income) and applies your actual brackets.
If you're a single filer with $70,000 in regular wages plus a $5,000 bonus, your marginal rate on most of the bonus is 22% — which happens to match the flat withholding rate exactly. Your refund or payment will be driven by other factors, not the bonus. But if your total income kept you in the 12% bracket, you over-withheld on the bonus and you'll get that difference back.
Expecting a bonus? Use the Pay-Breakdown paycheck calculator to model your bonus paycheck and see the exact withholding breakdown before the deposit hits.