Employers can choose one of two options when calculating taxes on your bonus. Here’s how bonuses are taxed, and how to lower ...

$220.00 federal income tax withholding + 76.50 total FICA withholding + 46.30 state income tax withholding = $342.80 in total bonus tax withholding. The net bonus you issue to your employee equals ...

Note: If your supplemental wages for a year total more than $1 million, your employer must use the flat rate method and calculate your bonus withholding over $1 million at 37 percent. The ...