Some companies choose to calculate an employee's bonus based on the employee's hourly wage or rate. When using this method, the company will use the hourly wage and set multiplier to calculate the ...

All bonuses under $1 million will be taxed at a 22% rate, and all bonuses over $1 million will be taxed at a 37% rate. These bonus payments are often made outside of the regular payroll cycle.

Calculate Medicare and Social Security Taxes; Multiply the employee's bonus by the IRS flat bonus tax rate of 25 percent to arrive at the federal tax amount by the flat percentage method.

This is the method your employer will use if, like I did, you receive your bonus money in a check separate from your paycheck. Your company simply withholds tax at a flat 25%, to keep things easy ...