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California Bonus Tax Calculator 2025

Estimate federal and California state tax withholdings on your bonus with 2025 rates.

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Estimated Tax Withholding

Federal Withholding (Flat Method) $0.00
Federal Withholding (Aggregate Method) $0.00
California State Withholding (10.23%) $0.00
Social Security (6.2%) $0.00
Medicare (1.45% + 0.9% if applicable) $0.00
Total Taxes Withheld (Flat Method) $0.00
Net Bonus (Flat Method) $0.00
Total Taxes Withheld (Aggregate Method) $0.00
Net Bonus (Aggregate Method) $0.00

Note: Aggregate method federal withholding uses 2024 IRS Publication 15-T data as a placeholder for 2025 and is an estimate. Consult a tax professional for precise calculations.

How to Use This Calculator

1

Enter Bonus Amount

Input your gross bonus. For amounts over $1 million, specific federal rates apply.

2

Provide Pay Details

Enter your regular pay per period and select your pay frequency. This is crucial for the Aggregate Method.

3

Select Filing Status

Choose your tax filing status (e.g., Single, Married Filing Jointly) for accurate aggregate calculations.

4

View Instant Results

See a detailed breakdown of withholdings: Federal (Flat & Aggregate), State, FICA, Total, and Net Bonus.

How Are Bonuses Taxed in California in 2025?

Bonuses in California are taxed as supplemental income using special withholding rules. The IRS and California FTB treat bonus payments differently from regular wages.

Your employer uses one of two methods to calculate bonus taxes:

Flat Rate Method (Most Common)

  • Used when bonuses come in separate paychecks
  • Federal rate: 22% for bonuses up to $1 million
  • California state rate: 10.23% flat rate
  • Bonuses over $1 million: 37% federal rate

Learn more about federal supplemental wage rules in [IRS Publication 15-A]

Aggregate Method

  • Used when bonuses are added to regular pay
  • Taxes calculated as if the combined amount is your normal salary
  • Often results in higher withholding

Federal vs California Bonus Tax Treatment 2025

Tax TypeFederal RateCalifornia RateNotes
Income Tax22% (up to $1M)10.23% flatSupplemental wage rates
Income Tax37% (over $1M)10.23% flatHigher earners pay more federally
Social Security6.2%N/ACapped at $176,100 wages
Medicare1.45%N/ANo wage limit
SDIN/A1.2%California disability insurance

Remember: These are withholding rates, not your final tax bill. Your actual tax depends on your total yearly income and tax bracket.

Does California Tax Bonuses Differently Than Regular Income?

Yes, California taxes bonuses differently from regular salary.

While your regular paycheck uses marginal tax rates based on your annual income, bonuses get taxed using flat supplemental wage rates.

Regular Income Tax in California:

  • Uses progressive tax brackets from 1% to 12.3% based on your total yearly income
  • High earners over $1 million pay an extra 1% mental health services tax
  • Your tax rate depends on which bracket your total income falls into

Bonus Tax Treatment:

  • California uses a flat 10.23% state tax rate on all bonuses
  • Federal uses 22% flat rate (up to $1 million in bonuses)
  • No progressive brackets – same rate regardless of your regular income
  • FICA taxes (Social Security and Medicare) still apply at normal rates

This difference means bonuses might be taxed at a higher or lower rate than your regular pay, depending on your income level. The flat rate system makes bonus tax calculations simpler for employers.

How Much Will I Get From My Bonus After Taxes? (Examples)

Here’s what you’ll actually receive from your California bonus after all taxes are withheld:

Bonus AmountFederal Tax (22%)CA State Tax (10.23%)FICA Tax (7.65%)Net Bonus
$1,000$220$102$77$601
$5,000$1,100$512$383$3,005
$10,000$2,200$1,023$765$6,012
$50,000$11,000$5,115$3,825$30,060
$100,000$22,000$10,230$7,650$60,120

Note: These examples assume no other deductions like 401(k) contributions or health insurance premiums.

Remember, this is what gets withheld from your bonus check. Your final tax bill may be different when you file your annual tax return. Learn more about California tax filing requirements to understand how bonuses affect your yearly taxes.

Is PTO Payout or Commission Taxed the Same as Bonuses?

Yes, both PTO payouts and commissions are taxed exactly like bonuses in California.

The IRS treats PTO payout as supplemental income, subject to federal income tax, Social Security, and Medicare taxes.

The percentage method used for bonuses also applies to commissions, severance pay, and overtime.

California law treats earned vacation time as wages under final paycheck rules.

When you cash out unused PTO, your employer must withhold taxes using the same supplemental wage rates as bonuses.

This means your PTO payout gets hit with the flat tax rates instead of your regular payroll deductions.

Here’s how all three are taxed identically:

  • Federal withholding: 22% flat rate (37% if over $1 million annually)
  • California state tax: 10.23% flat rate on all supplemental wages
  • FICA taxes: 7.65% (Social Security + Medicare)
  • California SDI: 1.2% for disability insurance

Whether you receive a $5,000 bonus, $5,000 commission check, or $5,000 PTO payout, the tax withholding is identical.

The only difference might be timing – some employers process these payments on different payroll cycles, but the tax rates stay the same.

Remember: This is what gets withheld from your paycheck. Your actual tax liability depends on your total yearly income when you file your return.

Why Do Bonuses Feel Like They’re Taxed So High in California?

Myth: Bonuses are taxed at 40% or higher rates than regular pay.

Reality: Bonuses aren’t taxed differently – they’re just withheld differently.

The confusion comes from how payroll systems calculate withholding, not actual tax rates. Here’s what really happens:

The Withholding vs. Reality Problem: Your bonus gets withheld at flat rates (22% federal + 10.23% California + 7.65% FICA = about 40% total).

But this is just an estimate for withholding purposes. Your actual tax depends on your total yearly income and tax bracket when you file your return.

Why It Feels So High:

  • Timing shock: You see a big chunk taken out all at once
  • Aggregate method confusion: If your bonus is added to regular pay, the system thinks you earn that much every paycheck and withholds as if you’re in a higher tax bracket
  • Perception vs reality: The tax withholding is different, but the actual tax is calculated when the return is filed

The Truth About Your Tax Bill: You won’t know how much you actually owe until you file your tax return. If too much was withheld from your bonus, you’ll get a refund.

Many people actually get money back because their bonus withholding was higher than their real tax rate.

2025 IRS & California Supplemental Tax Rates

Here are the current federal and California tax rates for bonuses, commissions, and other supplemental wages:

Tax TypeFederal (IRS)CaliforniaCombined Rate
Income Tax22% (up to $1M)10.23%32.23%
Income Tax37% (over $1M)10.23%47.23%
Social Security6.2%N/A6.2%
Medicare1.45%N/A1.45%
CA SDIN/A1.2%1.2%
Total Withholding29.65%11.43%≈ 41%*

*For bonuses under $1 million

Key Updates for 2025:

Federal Changes:

  • IRS supplemental wage rate remains at 22% for amounts up to $1 million
  • Supplemental wage rate increases to 37% for amounts over $1 million per year
  • Social Security wage base cap increased to $176,100

California Updates:

  • State supplemental tax rate stays at 10.23% for bonuses and stock options
  • California SDI rate remains at 1.2% on wages up to $176,100
  • No changes to California’s flat bonus withholding structure

Important Note: These are withholding rates, not your final tax rates. Your actual tax liability depends on your total annual income and may result in a refund if too much was withheld.

The combined 41% withholding rate explains why California bonus checks feel so heavily taxed, but remember – this is just temporary withholding that gets settled when you file your tax return.

FAQs about California Bonus Tax 2025

How is a bonus taxed in California?

Bonuses in California are taxed as supplemental income at a flat state rate of 10.23%, plus federal withholding (usually 22% or higher based on income). Unlike regular wages, they’re not subject to the standard progressive tax brackets for state income tax.

What is the California bonus tax rate in 2025?

As of 2025, California taxes bonuses at a supplemental rate of 10.23%, unchanged from recent years unless new legislation passes. Federal rates also apply, typically starting at 22%, depending on your total earnings.

How do I calculate my bonus tax in California?

Multiply your bonus by 10.23% for California’s state tax, then add the federal supplemental rate (e.g., 22% for amounts up to $1 million). For example, a $10,000 bonus would face $1,023 in state tax plus $2,200 federal, totaling $3,223 withheld before other factors like deductions.

Are bonuses taxed differently in California compared to other states?

Yes, California’s 10.23% supplemental rate is higher than many states, like Texas (0%) or Florida (0%), but lower than New York’s 11.7%. Each state sets its own rules, and California’s high rate reflects its overall tax structure.

Can I reduce my California bonus tax?

You can lower your tax by contributing to a 401(k) or HSA before the bonus is taxed, reducing your taxable income. Timing the bonus near year-end or consulting a tax pro for California-specific credits can also help.

Why is my California bonus tax so high?

California’s 10.23% supplemental rate, combined with federal withholding and possibly high income brackets (up to 13.3%), pushes the total tax up. It feels steep because bonuses aren’t taxed progressively like regular wages.

Does California tax bonuses differently for residents vs. non-residents?

California taxes bonuses earned from work done in the state at 10.23% for both residents and non-residents. Non-residents only pay on California-sourced income, while residents owe tax on all income, regardless of where it’s earned.

How does California tax stock bonuses?

Stock bonuses, like RSUs, are taxed as supplemental income at 10.23% in California when they vest, plus federal rates. Their value is based on the stock price at vesting, not when you sell, unlike capital gains.

What’s the difference between California bonus tax and regular income tax?

Bonuses are taxed at a flat 10.23% state rate as supplemental income, while regular income follows California’s progressive tax brackets (1%–13.3%). This flat rate simplifies withholding but can hit harder on large bonuses.

Is there a cap on California bonus tax rates?

No, California’s supplemental rate is fixed at 10.23% for state tax, with no upper limit tied to bonus size. Federal rates cap at 37% for amounts over $1 million, but California doesn’t add extra beyond 10.23%.

How does California’s supplemental tax rate apply to bonuses?

California applies a flat 10.23% rate to bonuses as supplemental income, separate from your regular paycheck’s progressive tax. Employers withhold this upfront, alongside federal supplemental rates, for simplicity.

Are there tax exemptions for bonuses in California?

No specific exemptions exist for bonuses in California—they’re taxed as regular income at 10.23%. General deductions (e.g., charitable contributions) might lower your overall tax, but nothing targets bonuses alone.

How do local taxes in California affect bonus taxation?

California has no statewide local income tax, but cities like San Francisco impose payroll taxes on employers, not directly on your bonus. Your take-home pay isn’t affected by local income taxes, just state and federal rates.

What deductions can I use to lower my California bonus tax?

You can reduce taxable income with pre-tax deductions like 401(k) contributions or health premiums if arranged before the bonus is paid. California also allows itemized deductions (e.g., mortgage interest), but they apply to your overall tax, not just the bonus.

How does California tax one-time vs. recurring bonuses?

Both one-time and recurring bonuses are taxed the same in California—at 10.23% as supplemental income. The frequency doesn’t change the rate, only the total tax withheld over time.

Do California bonus taxes change based on income brackets?

No, the state supplemental rate stays 10.23% regardless of your income bracket, unlike regular wages (1%–13.3%). Federal rates might rise with income, but California’s bonus tax is fixed.

How are bonuses taxed for remote workers in California?

If you work remotely for a California-based company, your bonus is taxed at 10.23% if the income is sourced to California. Non-residents only pay on work physically done in-state, per California tax rules.

What’s the California bonus tax withholding process?

Employers withhold 10.23% for California and typically 22% for federal taxes from your bonus before you get it. They report it on your W-2 as supplemental income, separate from regular wages.

Are signing bonuses taxed differently in California?

No, signing bonuses are taxed like other bonuses—at California’s 10.23% supplemental rate plus federal withholding. They’re treated as regular supplemental income, regardless of purpose.

How do I report a bonus on my California state taxes?

Your bonus is included in your W-2’s total wages (Box 1), so you report it on your California Form 540 with other income. No separate bonus line exists—just ensure withholdings match your records.