Getting a bonus feels great, but many Arizona employees are surprised when the check looks smaller than expected. That’s because bonuses are treated as taxable income. Both the IRS and the State of Arizona apply standard withholding rules, so what you actually keep depends on federal, state, and payroll taxes. Here’s a clear guide with examples.
Quick Snapshot: Arizona Bonus Taxes in 2025
- Federal tax withholding: 22% flat rate on bonuses under $1 million (37% if above).
- FICA taxes: 6.2% Social Security + 1.45% Medicare = 7.65% total.
- Arizona state tax: Flat 2.5% rate (employees may choose 0.5%–3.5% on Form A-4).
- Take-home from a $5,000 bonus: About $3,390 after all withholdings.
How Federal Taxes Apply to Bonuses
The IRS classifies bonuses as supplemental wages. Employers can withhold using:
- Flat percentage method: 22% federal withholding for bonuses under $1 million.
- Aggregate method: Bonus is added to your regular paycheck and taxed at your normal rate.
Want to understand how regular wages break down? Check out this guide on how much tax is withheld from a $5,000 paycheck in Arizona.
FICA: Social Security and Medicare
Your bonus is also subject to payroll taxes:
- Social Security (6.2%): $5,000 × 6.2% = $310
- Medicare (1.45%): $5,000 × 1.45% = $72.50
- Total FICA: $382.50
High earners may also owe an extra 0.9% Medicare surtax on wages above $200,000 (single) or $250,000 (married).
Arizona State Bonus Tax Rules
Arizona does not have a special supplemental tax rate for bonuses. Instead, bonuses are taxed the same as regular wages at the flat 2.5% state income tax rate in 2025.
- On a $5,000 bonus, Arizona state withholding = $125.
- Employees may adjust their withholding using Form A-4, choosing between 0.5% and 3.5%. If no election is made, the default is 2%.
For more clarity on paycheck structures, see how gross pay compares with net pay in our Arizona paycheck breakdown guide.
Example: $5,000 Bonus Breakdown in Arizona
| Deduction Type | Amount |
|---|---|
| Federal (22%) | $1,100 |
| Social Security (6.2%) | $310 |
| Medicare (1.45%) | $72.50 |
| Arizona State (2.5%) | $125 |
| Total Withheld | $1,607.50 |
| Net Bonus | $3,392.50 |
Other Bonus Amount Examples
| Bonus Amount | Federal (22%) | FICA (7.65%) | Arizona (2.5%) | Net Bonus |
|---|---|---|---|---|
| $1,000 | $220 | $76.50 | $25 | $678.50 |
| $5,000 | $1,100 | $382.50 | $125 | $3,392.50 |
| $10,000 | $2,200 | $765 | $250 | $6,785 |
Common Questions About Arizona Bonus Taxes
Are bonuses taxed more than regular pay?
No. Bonuses are taxed as regular income, but employers often withhold at the flat 22% federal rate, which can feel higher.
Do I pay Arizona tax on my bonus?
Yes, at the flat 2.5% rate, or 0.5%–3.5% depending on your Form A-4 election.
Do FICA taxes apply to bonuses?
Yes. Social Security and Medicare are withheld just like regular wages.
How can I reduce tax on my bonus?
Consider directing part of your bonus to a 401(k), HSA, or FSA to reduce taxable income.
Will I owe more at tax time?
Maybe not—year-end taxes depend on your total income and bracket. If too much was withheld, you’ll receive a refund.
Harry is the creator of ArizonaPaycheckCalculator.com, a trusted resource for accurate and easy-to-use payroll and tax calculators. With a focus on clarity and precision, Harry helps Arizona residents understand their take-home pay, deductions, and withholdings. Dedicated to making complex calculations simple, he combines financial knowledge with user-friendly tools to save users time and confusion.