In the United States, bonuses are taxed, but not exactly the same way as regular salary.
How Bonuses Are Taxed in the US
Bonuses are considered “supplemental wages” by the IRS, and there are two main ways they can be taxed:
Percentage Method (Flat Rate) - Most Common and this is what is applied by PGC
The IRS allows employers to withhold a flat 22% for federal income tax (as of 2025) on bonuses up to $1 million.
Aggregate Method (If Paid with Regular Wages)
If your bonus is paid with your regular paycheck and not separated out, your employer may withhold tax based on your normal income tax rate from the tax tables, which could be higher or lower than 22%.
This can make it feel like more tax is being taken out of your bonus, but it's just based on your total income level.
Other Deductions ALSO Apply
A bonus is also subject to:
Social Security tax
Medicare tax
State and local taxes, if applicable
Any 401(k) or other deductions you have set up