Retention Bonus Tax Calculator
A retention bonus paid as cash is taxed like any bonus — 22% federal withholding, 7.65% FICA, state supplemental rate. If yours vests over time or is deferred into next year, the tax moves with the vesting date, because you are taxed when the money is actually paid or made available.
Quick answer: A $20,000 cash retention bonus nets roughly $11,900–$14,070 depending on state. If it vests in tranches, each tranche is taxed and withheld in the year it pays.
$
%
Estimated take-home
$13,070.00
of $20,000.00 gross (65% kept)
| Gross bonus | $20,000.00 |
| Federal supplemental withholding (22%)prepayment — your real tax is set at filing | − $4,400.00 |
| FICA (6.2% SS + 1.45% Medicare) | − $1,530.00 |
| State supplemental (custom 5%) | − $1,000.00 |
| Net bonus | $13,070.00 |
Withholding-level estimate. The 22% federal rate is a prepayment, not your final tax — excess withholding is refunded when you file. FICA of 7.65% assumes you are under the Social Security wage base for the year. Not tax advice.
Core facts
| Cash bonus | Withheld at 22% + FICA + state when paid |
|---|---|
| Vesting tranches | Each payment is its own supplemental wage event in its own year |
| Deferred to 2027+ | Taxed when paid — useful if 2026 income is unusually high |
Common uses
- Evaluate a retention offer that pays over 2–3 years
- Compare cash-now versus deferred retention money
- Check the paycheck of a retention bonus already received
Frequently asked questions
Frequently Asked Questions
Is a retention bonus taxed more because it's tied to staying?
No. The retention condition changes nothing about tax. Only the payment timing matters — each year's payment carries that year's rates and withholding.
More Bonus Tax Calculators
Bonus Tax Calculator
See what lands in your account after the 22% federal supplemental withholding, FICA and state tax come off your bonus.
Bonus Calculator
Quick net estimate for a performance, year-end or spot bonus — enter the amount and state, get the take-home.
Sign-On Bonus Tax Calculator
Estimate the net of a new-job signing bonus after supplemental withholding, including clawback planning notes.
Bonus Tax Calculator CA
What a $10,000 bonus pays after tax in California: 22% federal, 7.65% FICA and California withholding, itemized.
Bonus Tax Calculator NY
What a $10,000 bonus pays after tax in New York: 22% federal, 7.65% FICA and New York withholding, itemized.
Bonus Tax Calculator TX
What a $10,000 bonus pays after tax in Texas: 22% federal, 7.65% FICA and Texas withholding, itemized.
Bonus Tax Calculator FL
What a $10,000 bonus pays after tax in Florida: 22% federal, 7.65% FICA and Florida withholding, itemized.
More guides
How Are Bonuses Taxed?
The 22% supplemental rule, the aggregate method, FICA, state tax — and why over-withheld bonus tax comes back as a refund.
Is Overtime Taxed More?
Overtime is withheld at a higher flat rate but taxed as ordinary income — and from 2026 the premium gets a federal deduction.
No Tax on Overtime, Explained
The 2026 OBBBA overtime deduction in plain English: what qualifies, the caps, the phase-out, and the fine print.
What Is Time and a Half?
The FLSA overtime rule, who's exempt, how the rate is computed, and state rules that go beyond 1.5×.