Aggregate Method

The aggregate method withholds federal income tax on a bonus by adding it to regular wages for the pay period, figuring withholding on the total as if it were a normal check, then subtracting what was already withheld from the regular pay.

Because withholding tables annualize each check, a large bonus paid this way looks like a much higher salary for that one period. The result can be more withheld than the 22% flat rate method, even though your actual tax for the year is the same either way.

Employers must use it when a bonus is mixed into a regular check without a separate amount, or when no income tax was withheld from your regular pay. Compare the two in the bonus paycheck calculator, and see supplemental wages and whether bonuses are taxed differently.