Texas Bonus Tax Calculator (2026)
Bonuses, sign-ons, performance payouts, and RSU vests all run through the IRS’s supplemental wage rules. We model the flat 22% (or 37% above $1M YTD) plus FICA so you know what hits your account. Texas, true to form, adds nothing.
IRS lets employers withhold at a flat 22% on supplemental wages up to $1M and 37% above. Your final tax may differ when you file — true-up happens on your return.
How bonus withholding actually works
When your employer pays a bonus separately from your regular paycheck, IRS rules let them use a simplified flat withholding rate instead of running it through the W-4 tables. For 2026 that’s 22% on supplemental wages up to $1 million in a calendar year, and 37% above that threshold.
That’s only withholding — the actual tax is still calculated on your annual return. If your marginal tax bracket is 22%, you’re roughly square. If it’s 24% or higher, you’ll likely owe more at filing. If it’s 12%, you’ll get a refund.
FICA still applies
Bonuses count as wages for Social Security and Medicare. SS is 6.2% up to the projected $178,500 wage base; once you’re past it (often early in the year for senior tech and finance roles), SS stops. Medicare is 1.45% on all wages, plus 0.9% additional Medicare above $200k single / $250k joint. So a $50k bonus paid mid-year to someone already above the SS wage base owes about 1.45% + maybe 0.9% Medicare — meaningfully less than the same bonus paid in January.
Strategies for big Texas bonuses
- Time it after the SS wage base. If you control when a bonus or sign-on hits, paying it in Q4 (after you’ve already maxed Social Security) reduces FICA on the bonus.
- Direct it to a 401(k). Some employers let you contribute a percentage of bonuses to your 401(k), shielding federal tax. Check your plan rules.
- Plan an April top-up. If you’re in the 24%+ bracket, set aside ~3-15% of net bonuses to cover the under- withholding. Better than a surprise.
Frequently asked questions
Why was so much taken out of my bonus?
The IRS treats bonuses as 'supplemental wages' and lets employers withhold at a flat 22% (37% on amounts above $1M YTD). FICA still applies (6.2% Social Security up to the wage base, 1.45% Medicare on all of it, plus 0.9% additional Medicare above thresholds). Combined, you can lose 30%+ at withholding even if your effective tax rate is much lower.
Will I get some of it back at tax time?
Often, yes. The 22% flat rate is a withholding shortcut, not your actual tax. If your marginal rate is below 22% (most people earning under ~$48k single or $98k joint), you'll likely get a refund. If you're in the 24%, 32%, or 35% bracket, you'll usually owe more in April.
Does Texas tax bonuses?
No. Texas has no state income tax of any kind on wages, bonuses, RSUs, or other supplemental income. The only deductions on a Texas bonus are federal income tax withholding and FICA.
What about RSU vests?
RSUs are taxed as ordinary supplemental income at vest, with the same 22% / 37% federal withholding default. Many high-earning Texans are systematically under-withheld on RSUs and need to make estimated payments or set aside cash for April. Talk to a CPA if your equity comp is meaningful.
Aggregate vs flat-rate withholding — what's the difference?
Flat rate (22%/37%) treats the bonus as a separate supplemental wage. Aggregate combines the bonus with your regular paycheck and uses the W-4 tables — often resulting in higher withholding for high earners. Most large employers use flat-rate; ask payroll if you're unsure.