Bonuses, commissions, severance, back pay, and cashed-out PTO are all supplemental wages — and the IRS lets employers withhold federal tax on them at a flat 22% (37% above $1 million per year). This supplemental wage tax calculator applies that flat rate plus FICA and your state supplemental rate so you can see the withholding and net amount on any supplemental payment for 2026.
A $10,000 supplemental payment with no state tax has 22% federal ($2,200) plus 7.65% FICA ($765) withheld — total $2,965 — leaving $7,035. The same payment in a state with a 5% supplemental rate loses an extra $500, netting $6,535. The calculator handles bonuses, commissions, severance, and other supplemental types the same way because the IRS withholding rule is identical for all of them.
The IRS defines supplemental wages broadly. They include:
What they have in common is that they are paid in addition to your regular wages, which is why the IRS allows the streamlined flat-rate withholding.
Employers can withhold federal income tax on supplemental wages two ways:
One key rule: any supplemental wages exceeding $1,000,000 in a calendar year must use 37% on the excess — the employer has no choice on that portion.
| Gross supplemental | Federal 22% | FICA 7.65% | Net |
|---|---|---|---|
| $2,000 | $440.00 | $153.00 | $1,407.00 |
| $5,000 | $1,100.00 | $382.50 | $3,517.50 |
| $10,000 | $2,200.00 | $765.00 | $7,035.00 |
| $25,000 | $5,500.00 | $1,912.50 | $17,587.50 |
The flat 22% is a withholding rate, not the tax you ultimately owe. Supplemental wages are ordinary income; at filing they are taxed at your real marginal bracket. If your effective rate is below 22%, you recover the difference as a refund; if you are a high earner above 22%, you may owe more. This is why a year with large commissions or a big severance can change your refund or balance due significantly — plan for the reconciliation, not just the withholding.
FICA on supplemental wages follows the same $184,500 Social Security wage base as regular pay. If your year-to-date wages already exceed that base, the 6.2% Social Security portion no longer applies to the supplemental payment, so only 1.45% Medicare (plus 0.9% additional Medicare if over $200,000) remains. For most mid-year payments below the cap, the full 7.65% applies, which is the calculator's default.
Payments outside regular salary: bonuses, commissions, overtime, severance, sick-leave payouts, back pay, awards, and taxable fringe benefits.
A flat 22% federal up to $1 million per year, 37% above that, plus FICA and any state supplemental rate.
Commissions are supplemental wages, so withholding may differ, but the final tax is the same ordinary-income marginal rate at filing.
Yes — 22% flat federal (or aggregate method) plus FICA and state tax. It is fully taxable ordinary income.