California Bonus Tax Calculator:
Employers' Trusted Tool for Accurate Bonus Payments
The California bonus tax calculator, featured at the top of this page, uses the supplemental tax rate to simplify determining the net pay (or take-home pay) your employee should receive for wage payments, such as bonus compensation. We also offer a California payroll calculator that employers trust, which you may want to try through beyond.
Does California Tax Bonuses?
Yes, California does tax bonuses. If a bonus is paid alongside an employee’s regular wages, the combined total is taxed as regular income. However, if the bonus is paid separately, California allows employers to withhold tax at a flat rate of 10.23% for bonuses.
How to Calculate Bonus Tax in California
If the bonus is paid separately, use the 10.23% flat rate. If it is combined with regular wages, you must use the standard withholding tables for the total amount. It is worth noting that for certain other supplemental wages, a 6.6% rate may apply.
What is the Bonus Tax Rate in California?
The applicable flat rate is 10.23% for state taxes, plus 22% for federal taxes (our tool at the top of the page will calculate this for you). If the bonus is combined with regular wages, use the standard withholding tables for the combined amount. For other supplemental wages, a 6.6% rate may be used.
How Do Bonuses Work in California?
Employers have the flexibility to pay bonuses as a lump sum or included with a regular paycheck. If the payment is separate, employers must apply the appropriate flat rate and report the payment correctly on Form W-2.
Why Are Bonuses Taxed Differently from Standard Pay?
The state offers a flat rate to streamline withholding and prevent underpayment. The rate is also set higher to account for the variable nature of bonus payments.
How Can California Employers Pay Bonuses to Employees?
Bonuses in California can be paid using the following methods:
– Check
– Direct deposit
– Pay card
How Much Tax is Taken Out of a Bonus in California?
The total withholding, not including Social Security or Medicare taxes, is 32.23%, which is the sum of the 10.23% flat state rate and the 22% federal rate.