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Bonus Tax Formula:
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This calculator helps estimate the taxes withheld from a one-time bonus payment in New Jersey, considering both federal supplemental tax rates and New Jersey state tax rates.
The calculator uses the following formula:
Where:
Explanation: Bonuses are considered supplemental wages and are taxed differently than regular wages. This calculator provides an estimate of the combined federal and state tax withholding.
Details: The federal government typically withholds 22% on supplemental wages under $1 million. New Jersey taxes bonuses at the same rate as regular income (currently 6.25%). These rates may vary based on specific circumstances.
Tips: Enter your gross bonus amount, federal tax rate (default is 0.22 for 22%), and NJ state tax rate (default is 0.0625 for 6.25%). All values must be positive numbers.
Q1: Is the federal bonus tax rate always 22%?
A: For bonuses under $1 million, the standard rate is 22%. For amounts over $1 million, the rate increases to 37%.
Q2: Are bonuses taxed differently in NJ than regular income?
A: No, New Jersey taxes bonuses at the same rate as regular income (currently 6.25%).
Q3: Will I get a refund if too much tax is withheld?
A: Yes, if too much tax is withheld, you'll receive a refund when you file your annual tax return.
Q4: Are there deductions that can reduce bonus taxes?
A: Standard deductions apply to your total annual income, not specifically to bonuses. The withholding is an estimate that will be reconciled when you file.
Q5: Is Social Security and Medicare tax also withheld from bonuses?
A: Yes, these are additional withholdings (7.65% total) not included in this calculator which focuses only on federal income tax and NJ state tax.