Bonus & Supplemental Tax Rates by State (2026 Guide)
State supplemental withholding rates for 2026, plus the federal 22% bonus rule. See flat-rate states, no-special-rate states, and the nine with no bonus tax.
This article is for general information, not tax or legal advice. Supplemental withholding rates change most years, and several states adjusted theirs effective January 1, 2026. Confirm any figure against your state’s own 2026 withholding instructions or the IRS before you run payroll.
Maybe you’ve got a bonus coming and want to know how much your state will keep. Maybe you’re running a bonus payroll and need the right supplemental rate. Either way, this is the reference table you’re after.
A bonus really has two layers. The federal government applies one supplemental rate, and your state may apply a second on top. The rest of this guide walks through the federal rule, sorts the states into three groups, and hands you the state-by-state table.
What counts as supplemental wages?
The word “bonus” is shorthand. The IRS uses a broader category called supplemental wages, and the same rules apply to everything in it.
Supplemental wages include bonuses, commissions, overtime, severance, back pay, retroactive raises, prizes and awards, accumulated sick pay, and certain taxable fringe benefits. Anything outside your regular, recurring paycheck usually lands here.
Regular wages run through the standard withholding tables tied to your W-4. Supplemental wages get their own treatment, which is why a bonus can be withheld at a flat percentage instead of your normal rate.
The federal supplemental rate: 22% (and 37% over $1M)
At the federal level, supplemental wages have a flat withholding rate that does not depend on your tax bracket.
The rate is 22% on supplemental wages up to $1 million in a calendar year. On the portion above $1 million, the rate jumps to a mandatory 37%. Both figures are confirmed for 2026 in IRS Publication 15, and they were made permanent by the One Big Beautiful Bill Act (P.L. 119-21), which extended the earlier rate structure.
That 22% is a withholding default, not your final tax. It is a prepayment your employer sends to the IRS, and it gets reconciled against your real rate when you file. If you want the full breakdown of why the flat rate can feel like a penalty when it is not, see our companion post on why your bonus is taxed so high.
One more federal layer applies no matter which method your employer uses: FICA. Social Security takes 6.2% up to the 2026 wage base of $184,500, and Medicare takes 1.45% on every dollar, with an extra 0.9% once your year-to-date wages pass $200,000.
State supplemental rates: the three buckets
States do not all handle bonuses the same way. Sorting them into three buckets makes the whole picture easier to read.
Flat-rate states. These publish (or allow) a specific supplemental percentage for bonuses, similar to the federal 22%. Illinois at 4.95% and Georgia at 4.99% are examples.
No-special-rate states. These have an income tax but no separate supplemental rate. Employers withhold on a bonus using the ordinary wage tables or the aggregate method. Delaware, Mississippi, and Washington, D.C., work this way.
No-income-tax states. Nine states tax no wage income, so they withhold nothing from a bonus at the state level: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Knowing which bucket a state sits in tells you most of what you need before you even look up a number.
State-by-state supplemental withholding table (2026)
The table below lists states that publish a flat supplemental rate, then groups the rest. Figures are drawn from the EY 2026 compilation and state withholding instructions. Several states changed rates effective January 1, 2026 (Georgia, Idaho, Iowa, Kentucky, Mississippi, Missouri, Montana, Ohio, and Oklahoma among them), so treat these as a starting point and confirm the exact current figure with the state before you file.
| State | 2026 supplemental rate | Notes |
|---|---|---|
| Alabama | 5.00% | Flat supplemental |
| Arkansas | 3.90% | Flat supplemental |
| California | 10.23% / 6.60% | 10.23% on bonuses and stock options; 6.60% on other supplemental wages |
| Colorado | 4.40% | Flat rate ties to the state income tax rate |
| Georgia | 4.99% | Ties to the flat income tax rate; reduced effective 1/1/2026 |
| Idaho | 5.30% | Updated for 2026 |
| Illinois | 4.95% | Flat supplemental |
| Indiana | 2.95% | State rate reduced for 2026; counties add local tax |
| Iowa | 3.80% | Updated for 2026 |
| Kansas | 5.00% | Flat supplemental |
| Maine | 5.00% | Flat supplemental |
| Michigan | 4.25% | Flat rate ties to state income tax |
| Minnesota | 6.25% | Flat supplemental |
| Missouri | 4.70% | Updated for 2026 |
| Montana | 5.00% | Updated for 2026 |
| Nebraska | 3.50% | Flat supplemental; reduced from 5% for 2026 |
| New Mexico | 5.90% | Flat supplemental |
| New York | 11.70% | New York City residents add up to 4.25%; Yonkers adds a surcharge |
| North Carolina | 4.09% | Flat supplemental rate for 2026 |
| North Dakota | 1.50% | Flat supplemental |
| Ohio | 3.50% | Updated for 2026 |
| Oklahoma | 4.50% | Updated for 2026 |
| Oregon | 8.00% | Flat supplemental |
| Pennsylvania | 3.07% | Flat rate ties to state income tax |
| Rhode Island | 5.99% | Flat supplemental |
| Virginia | 5.75% | Flat supplemental |
| Wisconsin | 3.50% - 7.65% | Tiered by wage amount |
No-special-rate states (use regular tables or the aggregate method): Connecticut, Delaware, Washington D.C., Hawaii, Kentucky, Louisiana, Maryland (state plus a county add-on), Massachusetts, Mississippi, New Jersey, South Carolina, Utah, Vermont, and West Virginia. These have an income tax but no separate flat bonus rate, so withholding runs through the ordinary tables.
No-income-tax states (zero state withholding on bonuses): Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
A couple of details are easy to miss. California is the one to watch: many tables cite only 10.23% and drop the 6.6% “other supplemental” rate that applies to commissions and similar pay. Local taxes also stack on top in a few places, most notably New York City, where a resident bonus can carry the 11.70% state rate plus a city supplemental of up to 4.25%.
Flat rate vs. aggregate: which one hits your paycheck
The rate is only half the story. How your employer applies it decides how big the upfront bite feels.
The flat-rate (percentage) method applies a set percentage to the bonus. It is available when the bonus is paid separately, or listed as its own line, so a $5,000 bonus is withheld at the federal 22% plus your state’s flat rate, and that is that.
The aggregate method adds the bonus to your regular paycheck and runs the combined total through the normal withholding tables. Because those tables assume the inflated check repeats every pay period, they can withhold at a higher rate than 22%. The tax you owe does not change; only the size of the prepayment does.
Here is the same $5,000 bonus in a flat-rate state, using the federal percentage method and a 5% state supplemental rate:
| Layer | Rate | Amount |
|---|---|---|
| Federal income (supplemental) | 22% | $1,100.00 |
| Social Security | 6.2% | $310.00 |
| Medicare | 1.45% | $72.50 |
| State supplemental (example) | 5% | $250.00 |
| Total withheld | ~34.65% | $1,732.50 |
Net in this example: about $3,267. Swap in California’s 10.23% and the state layer alone more than doubles; swap in Texas and it drops to zero. That single state line is why the same bonus nets very differently depending on where you work.
If you would rather see this itemized for your own numbers than reach for a table, WorkLogs44 drops a bonus into its own income bucket and shows the federal, state, and FICA lines for all 50 states plus D.C. You can model it in the bonus tax calculator before the check ever lands.
Withholding is not your final tax
This is the part worth repeating, because the table above shows withholding, not tax.
At year-end, the IRS and your state do not care that some of your income arrived as a bonus. They pool your whole year of earnings and tax it at your real effective rate. Whatever was withheld from the bonus is credited against the total.
So the outcome depends on your bracket. If your true marginal rate is below the 22% federal supplemental rate, the bonus was over-withheld and the excess comes back as a refund. If your rate is higher, the flat 22% under-withheld and you may owe the difference. The same logic applies to the state layer.
That is the practical takeaway: a big withholding number on a bonus stub is usually a timing issue, not a permanent loss. To settle it precisely for your own situation, run the numbers with our calculator tools or read the rest of our payroll guides.
Frequently Asked Questions
What is the supplemental tax rate for 2026?
The federal supplemental rate is a flat 22% on supplemental wages up to $1 million in a year, and 37% on the portion above $1 million. States add their own rate on top, which varies from zero to about 11.7%.
Are bonuses taxed differently in every state?
States fall into three groups. Some publish a flat supplemental rate for bonuses, some have income tax but no special bonus rate so they use the regular tables, and nine have no state income tax at all.
Which states have no tax on bonuses?
Nine states have no state income tax on wages, so they withhold nothing from a bonus at the state level: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
What is the California bonus tax rate?
California uses two supplemental rates. Bonuses and stock options are withheld at 10.23%, and other supplemental wages such as commissions are withheld at 6.6%. This is state withholding only, on top of federal and FICA.
What is the difference between the flat-rate and aggregate methods?
The flat-rate method applies a set percentage, such as the federal 22%, to a separately paid bonus. The aggregate method lumps the bonus with your regular check and runs the total through the ordinary withholding tables, which often withholds more.
Do Social Security and Medicare come out of my bonus too?
Yes. Social Security at 6.2% up to the 2026 wage base of $184,500, and Medicare at 1.45% with an extra 0.9% over $200,000, apply to bonus pay just like regular wages, regardless of the income tax method.
Will I get some of my bonus withholding back?
Possibly. Withholding is a prepayment, not your final tax. If your true marginal rate is below the amount withheld, the excess comes back as a refund when you file. If it is higher, you may owe more.