How much of your bonus you actually take home (2027)

Your bonus letter names one number. Your bank account shows a smaller one, usually by a third, and the gap is not a mistake. A bonus is withheld on its own rules, at a flat rate that ignores most of what your W-4 says, and in a high-income year that flat rate is often less than what you actually owe.

This is the 2027 version of the question everyone asks in January: how much of it is mine? The short answer for a $40,000 bonus is $26,900 in California, $27,880 in New York and $30,620 in Texas, before Social Security. The longer answer explains each line, why April can ask for more, and what to decide before the money arrives.

The rules that set your withholding

The IRS calls a bonus supplemental wages, the same bucket as commissions, overtime paid separately and severance. When your employer pays it as its own check, or names it separately on a regular one, it can withhold federal income tax at a flat 22% instead of running it through your W-4. Once your supplemental pay for the calendar year passes $1 million, everything above that must be withheld at 37%. (IRS Publication 15, § 7, Supplemental wages)

Those two rates didn't change for 2027. They track the 22% and 37% income tax brackets, and the 2025 tax law made the current set of brackets permanent rather than letting them lapse after 2025. (IRS: federal income tax rates and brackets)

Then come the payroll taxes, which apply to a bonus exactly as they do to salary:

• Medicare, 1.45%, on every dollar. Once your wages from one employer pass $200,000 in the year, your employer must also withhold the Additional Medicare Tax of 0.9% on the rest. (IRS: Additional Medicare Tax questions and answers)
• Social Security, 6.2%, until your wages for the year pass the wage base. For 2027 the base is $192,300, up from $184,500 in 2026. (SSA: contribution and benefit base; Journal of Accountancy, Oct 2026)
• State income tax, if your state has one. Some states publish their own flat rate for bonuses; others withhold at your regular rate.
• Retirement deferrals, if your 401(k) election takes a percentage of bonus pay.

A $40,000 bonus, line by line

Here is the bonus most people in a six-figure role recognize: $40,000, paid in March, in California. The figures come from the same tax code RichDue runs on your own pay, not from a spreadsheet.

Worked example

A $40,000 bonus in California

A $40,000 bonus, paid as its own check

Federal withholding at the flat 22%

California at 9.3%, Medicare at 1.45%

Bonus

$40,000

Federal income tax (22%)

−$8,800

California (9.3%)

−$3,720

Medicare (1.45%)

−$580

Lands in your account

$26,900

An example, computed with the tax and plan code RichDue runs on your own numbers. Before Social Security and any 401(k) deferral, which come out too when they apply.

Of the $40,000, $13,100 is withheld before Social Security. If your salary hasn't yet reached $192,300 by March, which is true for most bonuses paid early in the year, another −$2,480 comes out, and what lands is $24,420. If you're already past $200,000 in wages with that employer, the Additional Medicare Tax takes −$360 instead, and Social Security has usually stopped by then.

The state matters more than people expect. The same bonus in four states:

Worked example

The same bonus in four states

A $40,000 bonus at 22% federal and 1.45% Medicare

Each state at RichDue’s default rate for high earners

California (9.3%)

$26,900

New York (6.85%)

$27,880

Illinois (4.95%)

$28,640

Texas (0%)

$30,620

An example, computed with the tax and plan code RichDue runs on your own numbers. City taxes, such as New York City’s, are not included.

The spread between California and Texas, a little under $4,000 on this bonus, is entirely the state line. New York City residents pay the city's income tax on top of New York State's, which the table leaves out.

Run your own bonus, state and federal rate in the bonus take-home calculator. It shows the same lines and lets you split what's left before payday.

Why April can ask for more

Withholding is a down payment on your tax bill, not the bill. The flat 22% is a convenience rate: it lets payroll withhold without knowing the rest of your income. If your top federal bracket is higher than 22%, every bonus dollar is taxed at that higher rate when you file, and the difference is due in April.

At six-figure salaries the top bracket is usually 24%, 32% or 35%. The 2027 income thresholds for each bracket come out in the IRS's annual inflation update, usually in late October or early November; projections put them about 3% above 2026's. (CBS News, Oct 2026) Whatever the thresholds, the gap on the bonus itself is simple: the difference between your bracket and 22%, times the bonus.

Worked example

What April can still ask for

The $40,000 bonus, $8,800 of it withheld for federal tax

Federal tax owed on the bonus at your top bracket

Top bracket 24%

$800

Top bracket 32%

$4,000

Top bracket 35%

$5,200

Top bracket 37%

$6,000

An example, computed with the tax and plan code RichDue runs on your own numbers. Federal only: deductions, credits and the rest of your withholding move it.

At a 32% bracket, the gap on this bonus is $4,000. At 35% it's $5,200. It's an estimate of direction more than an exact figure: deductions, credits, the rest of your withholding and any refund you'd otherwise get all move it. But at most six-figure salaries the direction is reliable. A bonus withheld at 22% is under-withheld.

Two ways to close the gap before April:

1. Raise your withholding on regular pay for the rest of the year with a new W-4 (Step 4(c), extra withholding per pay period). Withholding counts as paid evenly through the year, which also helps with the underpayment penalty.
2. Set the gap aside in a separate savings account the week the bonus lands, and leave it there until you file. It earns interest meanwhile, and the April bill becomes a transfer.

Either works. What doesn't work is spending the full net and discovering the gap in March of the following year.

Planning a bonus that hasn't happened yet

The bonus most people plan around is a target, not a promise. Your offer letter says 15% or 20%; the actual payout depends on your rating, the company's year and sometimes a committee you don't sit on. Plans built on the target amount break when the payout comes in lower.

RichDue puts a bonus on the 12-month plan as three cases rather than one number. The high case assumes the full target. The base case weighs the target by how likely you think a full payout is. The low case assumes a disappointing year. With a $40,000 target and an 80% chance:

Worked example

The bonus on a plan

A $40,000 target bonus in March, an 80% chance it pays in full

California withholding as above, plus Social Security: nothing else paid yet that year

Low case

$7,326

Base case

$19,536

High case: paid in full

$24,420

An example, computed with the tax and plan code RichDue runs on your own numbers. Take-home after withholding, as RichDue puts it on the 12-month plan.

The base case is $32,000 before withholding and $19,536 after; the low case, $12,000 before. The point isn't the precise low number. It's that anything committed before March 15, 2027 should still work in the low case, and anything that only works in the high case should wait until the money is in the account.

Decide before it lands

Most bonuses don't go to anything specific. They go to everything, a little at a time, because no one decided otherwise in advance. Deciding takes ten minutes and works best in four parts.

1. The April gap first. Use the table above. If you're in the 32% bracket, the first $4,000 isn't yours to spend.
2. Near-term goals and the cushion. Whatever is due in the next year or two: a down payment, a wedding, the car you'll replace, a few months of expenses if you don't have them in cash.
3. Invest for later. Retirement accounts you haven't filled this year, a brokerage account, extra principal on a loan. Move it the week the bonus arrives, on purpose.
4. Spend some on purpose. A plan that leaves nothing to enjoy gets raided. Name the part that's for living and spend it without guilt.

The split matters less than making it before payday. If your bonus has disappeared in past years, that's usually the reason: the decision was made one purchase at a time.

A short checklist for January

• Find out whether your employer pays the bonus as a separate check or with a regular paycheck, and whether it uses the flat 22% or its regular tables. Payroll or HR can tell you.
• Check your wages to date against $192,300 (Social Security) and $200,000 (Additional Medicare) so you know which lines apply.
• Look up your state's treatment. Some states withhold bonuses at a flat supplemental rate of their own.
• Check whether your 401(k) deferral applies to bonus pay and whether you want it to.
• Estimate the April gap and decide how to cover it: more withholding or a separate account.
• Write the split down before the money arrives.

What a plan adds to a calculator

A calculator answers one question once. The bonus is also a moment on a timeline: it arrives in a specific month, lands next to rent and a card bill, and changes what you can afford for the six months after it. A bonus that covers a tax gap, a trip and a down payment on paper may not cover all three in the order the bills arrive.

That's the part RichDue is built for. It puts the bonus on your 12-month projection in low, base and high cases, shows the take-home on its date, and asks you to plan it before the month arrives.

Sources

Checked October 30, 2026.

• IRS, Publication 15 (Circular E), Employer's Tax Guide: supplemental wages, the 22% optional flat rate and the mandatory 37% above $1 million.
• IRS, Federal income tax rates and brackets.
• IRS, Questions and answers for the Additional Medicare Tax: the 0.9% withholding on wages over $200,000.
• Social Security Administration, Contribution and benefit base; Journal of Accountancy on the $192,300 base for 2027, announced October 14, 2026.
• CBS News on the projected 2027 bracket thresholds, before the IRS's official release.
• State rates are RichDue's default withholding rate for high earners in each state, editable in the app.

Not tax advice. This is general information about how withholding works; your pay stub and a tax professional are the authority on your own numbers.