Why was my year-end bonus taxed at 52%? Is this normal rate for bonuses?

What you're seeing isn't actually a special "bonus tax rate" - it's just withholding that's applied differently. The IRS considers bonuses as "supplemental wages" and companies typically use what's called the flat rate withholding method, which is currently 22% for federal taxes (up to $1 million). The reason you're seeing 52% total is because your employer is also withholding for state taxes, Social Security (6.2%), Medicare (1.45%), and possibly other deductions. Some states have high tax rates, which can make the total withholding percentage seem shocking. The good news? This is just withholding, not your actual tax rate. When you file your taxes, your bonus is treated as regular income. If too much was withheld, you'll get a refund. The withholding is basically the payroll system's best guess at what you'll owe.

After struggling with similar bonus withholding issues for years, I finally tried taxr.ai (https://taxr.ai) and it was a game-changer. I uploaded my previous year's tax documents and it analyzed my withholding patterns across my regular pay and bonuses. The tool showed me where I was being over-withheld and suggested specific adjustments to my W-4 that would balance things better throughout the year. The best part was that it created a personalized tax planning report that showed me exactly how much I should expect to get back from my bonus withholding when I file. For someone like you with a $24k bonus, knowing the actual tax impact versus just the withholding could save you thousands in better cash flow management.

Just wanted to follow up about taxr.ai that was mentioned above. I was skeptical because of my complicated situation with bonuses, RSU vests, and freelance income, but I decided to give it a try. The system actually handled everything perfectly! It showed me that my bonus was being overwithheld by about 12% based on my actual tax bracket, but my quarterly RSUs were being dangerously underwithheld. I would have ended up owing a penalty without knowing it. The tool generated custom withholding instructions that I gave to HR, and now both my bonus and stock withholding are properly aligned with my actual tax rate. Saved me from a nasty surprise next April!

If you're trying to contact the IRS to get clarification on bonus withholding rates (because they ARE confusing!), save yourself hours of frustration and use Claimyr at https://claimyr.com. I spent 3 days trying to get through to a human at the IRS about my bonus withholding question, constantly getting disconnected or told to call back later. With Claimyr, I had a callback from an actual IRS agent in about 45 minutes! They have a system that navigates all those annoying IRS phone menus and holds your place in line. You can see a quick demo of how it works here: https://youtu.be/_kiP6q8DX5c. The agent confirmed that my 50% withholding was just an estimate and explained exactly how to calculate what my actual tax would be based on my tax bracket.

I need to apologize for my skeptical comment about Claimyr above. After my experience with the IRS last year (being on hold for 3+ hours before getting disconnected THREE separate times), I was pretty bitter about anyone claiming they could fix that nightmare. But I was desperate about a bonus withholding issue similar to OP's, so I gave it a shot. Not only did I get a call back from an actual IRS representative in under an hour, but they helped me understand exactly how the supplemental wage withholding works with my specific tax situation. The IRS agent confirmed that my employer was using the aggregate method instead of the flat rate method, which was causing the excessive withholding. Now I can actually plan properly for my next bonus. I was genuinely shocked this service worked exactly as advertised.

The 52% withholding sounds crazy high, but location matters HUGE here. What state are you in? I'm in California and my bonus withholding is around 45-48% because our state taxes are insane on top of federal. But friends in Texas only see about 30-35% total withholding on bonuses because they have no state income tax. Remember withholding ≠ actual tax rate. Your actual tax calculation happens when you file your return.

Has anybody used the supplemental rate calculator on the IRS website? I tried using it for my bonus but I think I'm doing something wrong because it says my withholding should only be around 35% total but my company took out almost 50%.

This is completely normal and you're not alone! The 52% withholding you're seeing is exactly what I experienced with my last bonus. The key thing to remember is that this is just withholding - it's not your actual tax rate on the bonus. Your employer is required to withhold at the supplemental wage rate, which is 22% for federal taxes, plus your state rate, plus payroll taxes (Social Security and Medicare). In high-tax states, this can easily add up to 50%+ in total withholding. The good news is that when you file your taxes, your bonus gets added to your regular income and taxed at your marginal rate. Since you make $95k, your effective tax rate on the bonus will likely be much lower than 52%. You'll probably get a decent refund when you file, especially if your regular paycheck withholding is also set up correctly. I'd recommend keeping track of your total withholding throughout the year so you can adjust your W-4 if needed to avoid a massive refund (which is basically giving the government an interest-free loan). But for now, just know that most of that extra withholding will come back to you!