About

receiving a bonus or commission is a financial milestone, but the discrepancy between the announced figure and the deposit in your bank account can be shocking. This variance is primarily due to the specific tax treatments applied to supplemental income. Unlike regular salary, bonuses are often subject to different withholding methods (such as the percentage method or the aggregate method), depending on the jurisdiction.

Accuracy in this calculation is vital for financial planning. Whether you are an employer trying to gift a specific net amount (grossing up) or an employee budgeting for a large purchase, understanding the exact tax liability prevents cash flow errors. This tool simplifies complex withholding rules into a clear estimation, allowing you to account for federal, state, and local deductions instantly.

Formulas

To determine the Net Bonus from a Gross amount, the formula accounts for the sum of all tax rates:

Net = Gross × (1 − R_total)

Where R_total represents the sum of federal, state, and local tax percentages. Conversely, to find the Gross amount required to achieve a specific Net target (Gross-Up), the formula is rearranged:

Gross = Net1 − R_total

Reference Data

Jurisdiction / Economy	Standard Bonus Tax Method	Flat Rate (Approx)	Social Security / Pension	Medicare / Health
United States (Federal)	Percentage Method (Supplemental)	22%	6.2%	1.45%
United Kingdom	PAYE (Marginal Rate)	20% - 45%	10% - 12% (NI)	N/A (NHS in tax)
Canada (Federal)	Periodic Method	15% - 33%	5.7% (CPP)	1.63% (EI)
Germany	Lohnsteuer (Annualized)	14% - 45%	9.3% (Pension)	7.3% (Health)
Australia	PAYG (Marginal)	19% - 45%	N/A	2% (Medicare)
Ireland	PAYE / USC	20% - 40%	4% (PRSI)	0.5% - 8% (USC)
France	PAS (Withholding)	0% - 45%	~9.7% (CSG/CRDS)	Included
Singapore	Progressive Rate	0% - 24%	20% (CPF)	N/A
Netherlands	Bijzonder Tarief	37.07% - 49.5%	Included	Included
Switzerland	Federal + Cantonal	0% - 11.5% (Fed)	5.3% (AHV)	N/A

Frequently Asked Questions

Bonuses are often classified as 'supplemental wages.' In many jurisdictions, like the US, employers are required to withhold a flat rate (e.g., 22%) which might be higher than your effective tax bracket if your regular income is lower, or lower if you are a high earner, leading to adjustments at tax time.

The Percentage Method applies a flat tax rate specifically to the bonus amount. The Aggregate Method combines the bonus with your regular salary for a payroll period and calculates tax on the total, often resulting in a higher withholding rate for that specific paycheck due to progressive tax brackets.

No, this tool calculates the withholding amount—the money taken out of the check before you receive it. Your actual final tax liability is determined when you file your annual tax return, where you may receive a refund or owe more depending on your total annual income.

Yes. Commissions are typically treated as supplemental income, similar to bonuses, and are subject to the same withholding rules in most tax systems.

Grossing up is a calculation used by employers who want an employee to receive a specific net amount. The employer pays the taxes on behalf of the employee, meaning the gross payment is increased so that after taxes are deducted, the target net amount remains.