Flat Bonus Payroll Calculator - Percentage Method - Free Bonus Payroll Calculator

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We also have other types of free paycheck calculators available on our Payroll Calculator page such as:



There is no charge to use our paycheck calculators. Simply enter your payroll information to estimate your paychecks. Use our payroll calculators as often as you need to.


What is a bonus?
A bonus is considered supplemental income - separate from your regular salary or hourly rate, but still considered income. Vacation pay and moving expenses are other examples of supplemental income, and although they are sometimes classified as fringe benefits, they rest under both definitions.

How are bonuses taxed?

Bonuses can be taxed in two ways:

Percentage Method. The percentage method taxes a bonus at a flat rate, normally 25%. If the bonus is in excess of $1 million, it is taxed at a rate of 39.6%. This means that if your bonus is $5,000, and you are taxed using the percentage method, $1,250 goes to the IRS. This method is easy to calculate for both employee and employer because the bonus is taxed at a flat rate. In most cases, this is ideal from your standpoint as the bonus receiver and taxpayer, too.

Aggregate Method. Using the Aggregate Method, your withholdings are calculated by adding your most recent paycheck and bonus together. Then, withholding amounts are computed by using the information you filled out on your W-4 form. Unlike the much simpler percentage method, the aggregate method is used when your employer pays your bonus (say, $5,000) with your most recent regular paycheck. Then, they determine the normal withholding amount based on IRS withholding tables for the sum of both amounts, subtract what was already withheld from your last paycheck, and withhold the rest from the bonus amount. To compute your take home pay based on the Percentage Method, useĀ Aggregate Bonus Calculator.

The problem with this approach is that instead of taxes being withheld at a flat 25%, and having that 25% rate apply only to the bonus amount, taxes are withheld at what is almost certainly a higher rate on the combined amount of your normal pay and the bonus. The result: a higher overall tax obligation for the same amount of income.

To begin please select a Year and State.

Did you know that you don't have to perform these calculations when you use Payroll USA?

PEO's will perform your payroll calculations by managing your payroll and they will even manage your payroll taxes for you.

To learn more about our payroll services or just want to compare costs.

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Please note: Our payroll calculators that are provided on our web site are only meant to provide general guidance and estimates about the payroll process. They should not be relied upon to calculate exact taxes, payroll or other financial data. They may not match your payroll results precisely and are not intended to provide tax or legal advice.

You should consult with a professional advisor or accountant regarding your specific payroll concerns.




Contact us at 1-866-752-3901 for more information .