No, bonuses are taxed at the same rate as your regular income. However, the IRS considers bonuses to be supplemental wages and gives employers options when it comes to how taxes are withheld. The method your employer chooses can impact the amount of your take-home pay, as well as the tax you pay upfront.

When your employer withholds taxes at the time they pay your bonus, it’s only an estimate of your tax. When you file your tax return, you’ll calculate your actual tax using all your income for the year, bonuses included, and reconcile any differences from your total withholding.

Keep in mind that a bonus may push you into a higher tax bracket. But, you are subject to a higher rate only on the portion of income that falls into that bracket.

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Sharon Brucker, CPA Senior Tax Research Analyst Published on: December 10, 2025
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*This content is for general informational purposes only. It is not intended to be comprehensive and should not be construed as professional tax or financial advice for any specific individual tax situation. Taxpayers should always consult a qualified professional for individual guidance. This information constitutes a solicitation under the Treasury Department's Circular 230. Most offices are independently owned and operated.