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Georgia Bonus Tax Guide: How Your Extra Income is Taxed in 2025
In Georgia, bonuses are taxed at a flat state rate of 5.49% plus federal taxes (typically 22% for bonuses under $1 million). Most employees keep about 65-70% of their bonus after all taxes.
Key Takeaways:
Georgia State Tax Rate: 5.49% on all bonuses.
Federal Tax Rate: 22% on bonuses under $1 million; 37% on amounts above $1 million.
FICA Taxes: Social Security (6.2%) and Medicare (1.45%) apply to all bonuses.
Additional Medicare Tax: 0.9% for individuals earning over $200,000 or couples over $250,000.
How Georgia Taxes Your Bonus in 2025
Receiving a bonus feels great, but understanding how it’s taxed helps you plan better. Georgia applies straightforward tax rules to your extra income.
Federal and State Tax Breakdown
When you receive a bonus in Georgia, expect these tax withholdings:
- Georgia state tax: 5.49% flat rate
- Federal tax: 22% for bonuses up to $1 million (37% for amounts over $1 million)
- Social Security: 6.2% (applies only up to the annual wage base limit)
- Medicare: 1.45% on all bonus amounts
- Additional Medicare: 0.9% on amounts over $200,000 (single) or $250,000 (married)
Example: $5,000 Bonus Tax Calculation
Here’s what happens when you receive a $5,000 bonus in Georgia:
| Tax Type | Rate | Amount Withheld |
|---|---|---|
| Federal Tax | 22% | $1,100 |
| Georgia State Tax | 5.49% | $274.50 |
| Social Security | 6.2% | $310 |
| Medicare | 1.45% | $72.50 |
| Total Tax | 35.14% | $1,757 |
| Take-Home Amount | $3,243 |
Federal Tax Rates for Bonuses in 2025
The IRS applies the following tax rates on supplemental income:
| Tax Component | Rate | Applies To |
|---|---|---|
| Federal Tax (Standard) | 22% | Bonuses up to $1 million |
| Federal Tax (Higher) | 37% | Amounts over $1 million |
| Social Security Tax | 6.2% | Up to wage base limit ($168,600) |
| Medicare Tax | 1.45% | All bonus amounts |
| Additional Medicare Tax | 0.9% | High earners ($200k/$250k) |
Two Ways Employers Calculate Bonus Taxes
Employers in Georgia use one of two methods to calculate withholding on your bonus:
1. Flat Rate Method (Most Common)
- Applies a straight 22% federal withholding
- Adds Georgia’s 5.49% state tax
- Simple calculation separate from regular paycheck
- Most employers prefer this method for its simplicity
2. Aggregate Method
- Combines your bonus with your regular paycheck
- Calculates tax on the total amount using tax brackets
- Subtracts tax already withheld from regular wages
- Applies the remainder as withholding on your bonus
- Often results in higher withholding for high-income earners
Georgia State Tax on Bonuses
Georgia has a flat state income tax rate of 5.49% for 2025. This rate applies to the entire bonus without deductions or exemptions. Unlike other states, Georgia has no local income tax, reducing your overall tax burden.
Employers withhold Georgia state taxes at the time of bonus payment, in addition to federal taxes.
Comparing Georgia Bonus Taxes to Other States
Georgia’s state tax rate is moderate compared to other states. Here’s how it compares:
| State | State Income Tax Rate on Bonuses |
| Georgia | 5.49% |
| Florida | 0% |
| California | Up to 13.3% |
| New York | 4% to 10.9% |
| Texas | 0% |
| North Carolina | 4.75% |
Georgia remains competitive due to its mid-range tax rate. States with 0% tax like Florida and Texas offer significant tax savings, while states like California have much higher rates.
Tips to Minimize Bonus Tax Impact
To reduce your tax burden, consider these strategies:
Adjust Your Withholding: Submit an updated W-4 form to your employer to align your tax withholding with your actual liability.
Maximize Retirement Contributions: Contribute to tax-deferred accounts like 401(k) or IRA to lower your taxable income.
Donate to Charity: Charitable donations are tax-deductible and can reduce taxable income.
Tax Planning Consultation: Work with a tax professional to estimate your tax liability and explore personalized strategies.
Final Thoughts
Understanding how Georgia taxes bonuses in 2025 can help you make informed financial decisions. With proper planning, you can minimize the impact of taxes on your bonus and maximize your take-home pay. If you’re unsure about your specific tax situation, consult with a tax advisor for personalized guidance.