California Bonus Tax Rate 2026: How Much Is Withheld and Why

A bonus in California often feels heavily taxed: around 41% of it can disappear from the paycheck. That's withholding, not necessarily the final tax. This article shows what's taken from a bonus in 2026, why, and how it compares with the tax you actually owe. Figures come from our bonus tax calculator and California paycheck calculator.

Short answer

California withholds 10.23% from bonuses and stock options (6.6% from other supplemental pay). On top of that come federal income tax, usually a flat 22%, Social Security (6.2%), Medicare (1.45%) and California SDI (1.3%). With the flat federal method, that is 41.2% of a typical bonus: on a $10,000 bonus you take home about $5,882.

What's withheld from a California bonus

The example assumes a single filer earning $100,000 a year, paid every two weeks, who has earned $50,000 so far this year.

The federal 22% (and 37% over $1 million)

IRS rules let employers withhold a flat 22% from supplemental wages such as bonuses. Supplemental pay above $1 million in a calendar year must be withheld at 37%. Employers can instead use the aggregate method, adding the bonus to a regular paycheck and withholding as if you earned that much every period. For the same $10,000 bonus, the aggregate method withholds $2,921.70 of federal tax instead of $2,200, leaving $5,160.30.

California's 10.23% vs 6.6%

California uses two flat supplemental rates: 10.23% for bonuses and stock options, and 6.6% for other supplemental wages.

Social Security, Medicare and SDI

Social Security stops once your wages for the year reach $184,500, so a bonus paid after that has no Social Security taken. Medicare has no cap, and an extra 0.9% is withheld on wages above $200,000. California SDI is 1.3% of all wages in 2026, with no wage limit.

Bonus take-home at different amounts

Same employee as above, flat federal method:

The share stays at 41.2% because every rate here is flat. It changes only if your year-to-date wages pass $184,500 (Social Security stops) or $200,000 (extra Medicare starts), or your supplemental pay passes $1 million.

Withholding vs the tax you actually owe

When you file, the bonus is simply added to your salary and taxed at your normal rates. For the $100,000 earner, the bonus adds $2,200 of federal tax, the same as the flat 22% withheld, because the extra income falls in the 22% bracket. California tax goes up by $930, since the bonus falls in the 9.3% bracket, so the 10.23% withholding takes $93 more than is owed and that comes back in your refund. Social Security, Medicare and SDI are the same either way.

Higher earners can be in a higher bracket than 22% federal or 10.23% state. Then withholding falls short and you owe the difference when you file. Use the California paycheck calculator to see your marginal rates. Our California income tax uses the Franchise Tax Board's latest published schedules until the 2026 ones are released.

Can you reduce the tax on a bonus?

• Put part of it in your 401(k) if your plan allows deferrals from bonuses. Pre-tax contributions lower federal and California income tax. See how a 401(k) affects your paycheck.
• Check your W-4. If big bonuses regularly leave you with a large refund or a bill, adjusting your W-4 (and California DE 4) spreads the tax more evenly.
• Ask about timing. A bonus paid in January instead of December falls in the next tax year, which helps if your income will be lower then.

Working in New York instead? See New York bonus tax rate 2026.

Sources

• IRS Publication 15: supplemental wages
• California EDD: supplemental wage withholding (DE 231PS)
• California EDD: 2026 SDI rate