How Bonuses Are Taxed in 2026: Supplemental Wage Withholding
Published on 2026 Financial Guides | Smart Paycheck Team
Many workers are surprised to see a higher tax rate withheld from their bonuses. However, bonuses are classified as supplemental wages by the IRS.
Flat Rate Withholding
For supplemental wages under $1 million, federal tax is typically withheld at a flat supplemental rate, while FICA and state taxes (like in Florida or Texas) still apply normally.