Federal Tax Rate On Bonuses 2025. How are taxes withheld on bonus payments? If your total bonuses are higher than $1 million, the first $1 million gets taxed at 22%, and every dollar over that gets.

You can minimize your tax burden by having your employer withhold taxes from each paycheck above your tax bracket, utilizing all available deductions, and taking advantage of qualified. The federal marginal tax rate is the federal income tax rate owed on your highest dollar of income.