Is bonus pay counted against Social Security earnings limit? Just received unexpected work bonus

Yes, bonuses do count as earned income toward the Social Security earnings limit. All wages count, including bonuses, commissions, vacation pay, etc. But there's good news - SSA usually applies the annual limit rather than strictly enforcing the monthly limit. So if your total yearly income (regular wages plus this bonus) stays under $22,320, you should be fine. If you do exceed the annual limit, they'll withhold $1 in benefits for every $2 you earn above the limit. They don't necessarily take a full month's worth of benefits for one month over the limit.

THEY WILL TAKE YOUR MONEY!!!! Same thing happened to my brother last year. He got a holiday bonus and went over by like $2K and they took TWO MONTHS of his checks away the next year. The SSA doesn't care if you didn't expect the money, they just see the numbers and take take take. The system is RIGGED against people who try to work!

You definitely need to report this change to SSA. But don't panic - this happens quite often. The earnings limit is really designed as an annual limit, and Social Security will calculate the adjustment based on how much you exceed the yearly amount. For 2025, you'll lose $1 in benefits for every $2 you earn above $22,320. So if your total earnings including the bonus will be $24,300, you're $1,980 over the limit. That means SSA will withhold about $990 in benefits (half of the overage amount). One important thing - they typically don't take this from each month going forward, but instead might withhold benefits for a month or two in the following year. You should contact SSA to let them know about this change in income so they can adjust properly and avoid a surprise later.

I went through something similar with my disability benefits, except mine was SSDI not retirement. I think they're different though because with SSDI there's a trial work period and then the limit is higher, like substantial gainful activity or something? Are you on SSDI or regular retirement? That might change how they count the bonus.

After struggling with a similar situation, I found that getting through to SSA directly was nearly impossible! I spent DAYS trying. Finally used a service called Claimyr (claimyr.com) that got me connected to an actual SSA agent in under 30 minutes. They have a video demo too: https://youtu.be/Z-BRbJw3puU Once I actually spoke with someone, they explained exactly how my bonus would affect my benefits and helped me report the income change properly. Much better than worrying for weeks!

my dad had this happen and just worked less hours the rest of the year to balance it out. could you maybe take some unpaid time off to stay under the yearly limit?

One more important point - while bonuses count as earned income, there's a special rule about when they count. For the earnings test, Social Security generally counts income when it's earned, not when it's paid. But for special payments like bonuses that are for work done in a previous year, they might not count toward the current year's limit. If your bonus is specifically for work performed before you started receiving Social Security, you can ask SSA to exclude it from the earnings test. You'll need documentation from your employer stating what period the bonus covers. Also, once you reach your full retirement age, these earnings limits no longer apply. So if you're close to FRA, this might only be a short-term issue.