Well, it's taxed as income. So you pay USC and income tax on it (~50% at higher band) Some employers can give you a €500 of your bonus in a tax free one-for-all voucher. (Raised from €250 this year). Other employers can offer you company shares to the value of your bonus. The scheme I'm in allows me With this tax method, the IRS taxes your bonus at a flat-rate of 25 percent, whether you receive $5000, $500 or $50 — however, if your bonus is more than $1 million, the tax rate is 39.6 percent. This percentage method may seem ideal as it tends to take less out of your bonus, Your bonus is taxed at the same rate as all of your other income. If you’re in the 33% tax bracket and you receive a bonus of $100,000, you will pay $33,000 in federal taxes. The state and local taxes work the same way. Multiply the bonus amount by your marginal tax rate to understand how much you will pay.