Bonus Gross-Up Calculator
Size a bonus so the employee nets the exact amount you promised, after federal supplemental tax, FICA and state withholding.
How it works
Combined rate = federal + state + FICA · Gross bonus = net ÷ (1 − combined%)
Bonuses are usually taxed as "supplemental wages," most commonly at the 22% flat federal rate, on top of FICA and any state tax. To promise a round net figure, you gross up against the sum of those rates rather than the employee’s marginal bracket. This is the standard method for holiday, spot and sign-on bonuses where the company wants the employee to receive a clean, specific amount.
Worked example
For a $1,000 net bonus at 22% federal + 5% state + 7.65% FICA = 34.65% total, divide 1,000 by (1 − 0.3465) = 0.6535, giving $1,530.22 gross. Withholding of $530.22 comes out, netting $1,000.
Frequently asked questions
Is a bonus really taxed at 22%?
The 22% is the flat federal withholding rate for supplemental wages under $1 million; it is not the final tax. Your actual tax is settled on your return, so an over- or under-withholding is trued up then. Amounts over $1 million are withheld at 37%.
Should I include Social Security and Medicare?
Yes — bonuses are subject to the 6.2% Social Security tax (up to the annual wage base) and 1.45% Medicare tax, so the 7.65% FICA rate is part of the gross-up unless the employee has already exceeded the Social Security cap.
Why does the employer pay more than the promised bonus?
Grossing up means the company shoulders the tax so the employee walks away with the exact net figure. The difference between gross and net is an added payroll cost the employer accepts to make the offer clean.
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Educational payroll estimate, not tax, payroll or legal advice. Rules and rates vary by jurisdiction and employer — confirm with your payroll department.