How Are Bonuses Taxed in 2026? Supplemental Wage Guide

Receiving a bonus check often comes with a surprise: the withholding rate feels significantly higher than your typical paycheck. Understanding the IRS supplemental wage rules explains why this happens.

The Flat 22% Federal Supplemental Rate

Under IRS rules, bonuses, awards, commissions, and overtime are classified as supplemental wages. If your employer pays your bonus separately from regular salary, they typically withhold a flat 22% federal tax on amounts up to $1 million.