The more complicated method your employer may use, or be required to use, is the aggregate method. This method is required in the following states:
- New Jersey
- Washington DC
- Puerto Rico
A much easier method that your employer may use is the flat rate or percentage method. When calculating your bonus this way, you don't consider your regular paycheck. This is because your bonus check only includes the bonus payment, no regular wages. This method uses a flat 22% to determine how much is being withheld from your bonus only. Calculate your regular paycheck as usual. That's it! The flat rate method is a much easier method for employers and employees to calculate. Use our Bonus Pay Percent calculator to see how much you will keep from this bonus!
To compare these two methods using our PaycheckCity Bonus calculators we will compare a $6,000 bonus in Georgia. The Gross pay is $50,000 with semi-monthly payments. Using these numbers in the calculator, the net pay using the flat rate is $4,101.00. The net pay using the aggregate rate is $3,689.42. That is almost half of your original bonus!
If you earn a bonus of more than $1 million, then you must use a completely different method! Calculate the $1 million using the methods above. However, everything more than $1 million must be taxed at 37%. So, if your employer uses the percentage method and you earn a bonus of $1,100,000, the $1,000,000 will be taxed at a flat 22% while the $100,000 will be taxed at 37%.
Supplemental bonuses include commissions, tips, overtime pay, vacation pay, sick pay and more.
Don't be surprised when you finally get your bonus check; calculate your bonus now!