Is a bonus taxed at a higher rate?

No. A bonus is taxed at your marginal rate, like the rest of your income. It can feel higher because of how tax is withheld at pay time, but the rate on the income is your normal marginal rate.

Why was so much tax taken from my bonus?

Employers use ATO withholding methods for lump-sum payments, which can take more or less than your average rate. It is withholding, not the final tax. Any difference is squared up when you lodge your return.

Will I get some bonus tax back?

Maybe. If more was withheld than your marginal rate requires, the excess comes back as part of your refund at tax time. If too little was withheld, you may owe the difference. Your return settles it.

Tax on a bonus

There is no special tax rate for a bonus. A bonus is added to your income and taxed at your marginal rate, the same as any other pay. At pay time, employers use ATO withholding methods for lump sums, so the tax taken from a bonus can look higher or lower than your usual rate. That is only withholding. It all reconciles when you lodge your tax return, where your total income and total tax are settled. This calculator estimates the marginal tax on a bonus. Figures are estimates, not advice.

Tax on a bonus (2026–27)

Salary before the bonus (annual)

Bonus

HECS/HELP debt

$3,400 of the bonus lands in your pocket

Tax on the bonus: $1,600
Effective rate on the bonus: 32%

Annual-basis estimate: the bonus is taxed at your marginal rate. Withholding at pay time uses the ATO lump-sum schedules and can differ; it reconciles at your tax return.

The marginal rates a bonus lands in (2026–27)

Taxable income	Bracket rate
$0 – $18,200	Nil
$18,201 – $45,000	15%
$45,001 – $135,000	30%
$135,001 – $190,000	37%
$190,001 and over	45%

Add the 2% Medicare levy (and any HECS/HELP rate) on top of the bracket rate to get the true marginal rate.

Worked example

A $5,000 bonus on a $85,000 salary in 2026–27 takes total income to $90,000. The extra tax is $1,600 — an effective rate of 32% on the bonus, the marginal rate at that income — leaving $3,400 in your pocket. See the underlying rates at tax brackets 2026–27.

Frequently asked

Is a bonus taxed at a higher rate?: No. A bonus is taxed at your marginal rate, like the rest of your income. It can feel higher because of how tax is withheld at pay time, but the rate on the income is your normal marginal rate.
Why was so much tax taken from my bonus?: Employers use ATO withholding methods for lump-sum payments, which can take more or less than your average rate. It is withholding, not the final tax. Any difference is squared up when you lodge your return.
Will I get some bonus tax back?: Maybe. If more was withheld than your marginal rate requires, the excess comes back as part of your refund at tax time. If too little was withheld, you may owe the difference. Your return settles it.