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Message: <blockquote data-quote="Fred&#039;s Myth" data-source="post: 3365548" data-attributes="member: 55587">The IRS gives two options for withholding on the bonus:<ul> <li data-xf-list-type="ul">Withhold taxes at a rate of 25 percent—regardless of your actual tax bracket.</li> <li data-xf-list-type="ul">Determine how much it should withhold on all your compensation for the pay period as if it were all regular wages. In this option—which is obviously more complicated, and can result in more of your bonus being withheld for taxes—your employer then reduces that amount by what it should withhold on the regular pay, and withholds the remainder on the bonus.</li> </ul>The 25% WH is only an option if your employer extends that option to you. Typically, it defaults to Option 2.</blockquote>