Bonus & Severance Tax Calculator
Estimate how much of your bonus or severance pay you actually take home after tax. Bonuses and severance are often taxed at higher withholding rates than regular salary.
Gross payout: $
Estimated tax: $
After-tax payout: $
Effective tax rate: %
How the Bonus & Severance Tax Calculator Works
This calculator estimates your after-tax bonus or severance payout by applying an estimated tax rate to your gross payment amount.
Actual withholding may differ based on employer payroll methods, total income, and local tax rules. Results are estimates only.
Bonus & Severance Tax Calculator FAQs
Why are bonuses taxed at a higher rate?
Bonuses are not necessarily taxed at a higher rate, but they are often withheld at a higher rate. Employers typically use a flat supplemental withholding rate, which can make bonuses appear more heavily taxed.
How are bonuses taxed in the United States?
In the U.S., bonuses are considered supplemental income. Employers may withhold federal taxes using either a flat rate method or by combining the bonus with regular wages and applying standard payroll withholding rules.
How is severance pay taxed?
Severance pay is treated as taxable income and is subject to federal, state, and payroll taxes. The withholding method is often the same as for bonuses.
Does this calculator show actual taxes owed or just withholding?
This calculator estimates tax withholding, not your final tax bill. Your actual tax owed depends on your total annual income and tax return.
Can I get some of the bonus or severance tax back?
Possibly. If too much tax was withheld from your bonus or severance pay, you may receive a refund when you file your tax return.
Are bonuses and severance subject to Social Security and Medicare taxes?
Yes. Bonus and severance payments are generally subject to Social Security and Medicare taxes, up to applicable wage limits.
Is bonus or severance pay taxed differently by state?
Yes. State tax treatment of bonuses and severance varies. Some states apply flat withholding rates, while others treat it as regular income.
Is this calculator tax advice?
No. This calculator provides estimates for informational purposes only and does not constitute tax, legal, or financial advice.