Sign On Bonus Tax Calculator, Sign On Bonus Calculator and the Make Whole Sign On Bonus to Ask For
A 15,000 dollar sign-on bonus looks like 15,000 dollars until the first paycheck, when it lands closer to 9,500. Meanwhile the bonus you were three months from collecting and the RSUs vesting next quarter stay behind. This calculator prices both sides of that trade, so the sign-on you ask for is the one that actually covers what you give up.
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What are you negotiating?
Your offer or current pay
Market-rate band
Talking points
Email template
Timing
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Direct answer
A sign-on bonus is taxed as supplemental wages. Your employer withholds federal income tax at a flat 22 percent (37 percent on any part above 1 million dollars in a year), plus 7.65 percent Social Security and Medicare and your state rate, so most people keep 60 to 70 percent of it. To make yourself whole when you change jobs, ask for a gross sign-on equal to the gross bonus, RSUs and match you forfeit, not their after-tax value, because the sign-on is taxed the same way they would have been.
Run the numbers
What the sign-on really nets, and the sign-on that makes you whole.
Enter the sign-on bonus in the offer, then what leaving your current job costs you: the annual bonus you will not be there to collect, the RSUs that would have vested in the next 12 months, any unvested 401(k) match, and any sign-on or relocation clawback you owe. Add your new salary, filing status and state rate. The calculator shows what the offered sign-on keeps after tax and the gross sign-on to counter with. Nothing is stored.
Sign on bonus calculator
2026 federal brackets, Social Security and Medicare
What you give up by leaving your current job
Sign-on bonus that makes you whole
gross, to replace you lose by leaving, after tax.
What the offered sign-on really nets
- Sign-on bonus (gross)
- Withheld at the flat 22 percent (settles when you file)
- Federal tax it really causes at your bracket
- Social Security and Medicare
- State income tax
- What you actually keep
A sign-on bonus is supplemental wages. Employers withhold federal tax at a flat 22 percent, 37 percent on the part above $1 million in a year (IRS Publication 15). Brackets from Rev. Proc. 2025-32, state tax applied as a flat rate, forfeited pay valued at your new salary. This is career coaching, not tax advice.
The problem
The recruiter asks what it would take to get you to sign. You say "cover my bonus," they offer 15,000 dollars, and you accept. You forgot the 20,000 dollars of stock that vests in February and the 401(k) match that is not vested until your third anniversary. The sign-on nets 9,500 dollars after withholding, and the real cost of leaving was closer to 20,000 after tax.
How Counteroffer handles it
Paste the offer and what you are leaving behind, and Counteroffer builds the make-whole case: the forfeited pay itemized with dates, the gross sign-on that replaces it after tax, the repayment terms to push back on, and the email that asks for it. Members get the full package for every negotiation on their plan.
The numbers
What a sign-on bonus really nets, and the sign-on that covers what you leave behind.
Every row is generated by the same formula the calculator runs, using 2026 federal brackets, Social Security and Medicare, and the state rate shown (5 percent unless stated). Forfeited pay is valued at the new salary. Figures are rounded to the nearest 10 dollars.
| Situation | Sign-on offered | What it nets | Pay you give up (gross) | Cost of leaving after tax | Sign-on that makes you whole | Gap |
|---|---|---|---|---|---|---|
| Mid level, $130,000 base, leaving a $12,000 bonus | $15,000 | $9,500 | $12,000 | $7,600 | $12,000 | covered, $3,000 spare |
| Senior engineer, $150,000 base, $12,000 bonus plus $20,000 of RSUs vesting in 12 months | $15,000 | $9,500 | $32,000 | $20,270 | $32,000 | short $17,000 |
| Same move, into California at 9.3 percent | $15,000 | $8,860 | $32,000 | $18,900 | $32,000 | short $17,000 |
| Same move, into a state with no income tax | $15,000 | $10,250 | $32,000 | $21,870 | $32,000 | short $17,000 |
| Manager, $140,000 base, owes a $10,000 clawback repaid with the tax recovered | $10,000 | $6,340 | $10,000 | $6,340 | $10,000 | covered |
| New hire, $90,000 base, owes a $2,500 clawback repaid in a later tax year | $0 | $0 | $2,500 | $2,500 | $3,830 | short $3,830 |
| Staff engineer, married, $210,000 base, $25,000 bonus, $40,000 RSUs, $6,000 match | $40,000 | $28,490 | $71,000 | $49,770 | $71,000 | short $31,000 |
| Director, married, $260,000 base, $60,000 bonus plus $80,000 RSUs | $75,000 | $51,490 | $140,000 | $96,110 | $140,000 | short $65,000 |
Two patterns fall out of the table. First, the make-whole sign-on equals the gross pay you give up, because a sign-on is taxed the same way the bonus and RSUs would have been; asking for the after-tax figure shortchanges you by a third. Second, the one exception is a small clawback repaid in a later tax year: 3,000 dollars or less cannot be deducted, so covering a 2,500 dollar repayment takes a sign-on of about 3,830 dollars.
The stat everyone quotes
"The 22 percent withheld from my sign-on bonus is the tax I owe on it."
It is a withholding rate, not a tax rate. What you really owe depends on your bracket for the whole year.
The flat 22 percent is the optional method employers use to withhold federal income tax on supplemental wages paid separately from salary (IRS Publication 15). It exists to make payroll simple. Your actual tax is settled when you file, at your marginal rate on your total income for the year.
That cuts both ways. A single filer earning 150,000 dollars sits in the 24 percent bracket, so a 15,000 dollar sign-on withheld at 22 percent leaves about 300 dollars to pay in April. A married engineer at 210,000 dollars is in the 22 percent bracket and comes out roughly even. Someone who starts a new job in October, with only a quarter of a year of salary on the return, is often over-withheld and gets part of it back.
Social Security and Medicare come out on top of that at 7.65 percent, until your wages for the year pass the 184,500 dollar Social Security wage base in 2026. States add their own supplemental rate: California withholds 10.23 percent on bonuses. That stack is why the take-home number surprises people, and why the ask should be built from the gross.
How to do it
How to negotiate a sign-on bonus that covers what you leave behind.
List every dollar that stays behind
Before you answer the recruiter, pull the numbers: the annual bonus and its payout date, each RSU tranche vesting in the next 12 months at today's share price, the unvested part of your 401(k) match, and any sign-on or relocation repayment you would trigger by resigning. These are documented costs, and documented costs are what a sign-on budget is for.
Ask for the gross, not what you would have netted
The bonus and RSUs you forfeit would have been taxed as wages. A sign-on is taxed the same way. So the replacement figure is the gross amount, not the after-tax amount. Asking for the net is the most common way candidates leave a third of the make-whole on the table.
Price the clawback separately
A clawback is repaid gross. If you repay it in the same calendar year the tax unwinds; in a later year the tax comes back only if the repayment is over 3,000 dollars (IRS Publication 525). Below that line, add the tax to the ask, which is what the calculator does.
Split it across two payments when the numbers are large
A large make-whole is easier for a company to approve in two parts: half in the first paycheck and half at month 6 or 12, or a cash sign-on for the bonus plus extra RSUs for the stock. It also keeps you out of a higher bracket in a single year.
Negotiate the repayment terms as hard as the amount
Most sign-on bonuses come with a clawback if you leave within 12 or 24 months. Ask for it to be prorated by months worked, to apply only if you resign, and to be measured against what you actually received rather than the gross. The sign-on bonus repayment calculator shows what a clause would cost if you left early.
Get every term in the offer letter
The amount, when it is paid, whether it is split, and the exact repayment language all belong in the written offer before you resign. A verbal "we will take care of your bonus" is not a number.
copy and paste
The reply that asks for a make-whole sign-on bonus.
Send this once you have the written offer and your own numbers. It works because it itemizes a real cost and gives the recruiter something concrete to take to the compensation team.
Subject: Re: Offer for [role] Hi [name], Thank you for the offer. I am excited about the role and I want to make this work. One item I need to resolve before I can resign: leaving [current company] now means giving up pay I have already largely earned. That is my [year] bonus of [amount], paid in [month], and [amount] of RSUs vesting over the next 12 months, for a total of [total]. I can share the grant schedule if helpful. Could we bring the sign-on bonus to [total], paid in my first paycheck? If a single payment is difficult, I am open to splitting it between my start date and month six. I would also ask that any repayment be prorated by months worked and apply only if I resign. With that settled, I am ready to sign. Best, [Your name]
Swap the bracketed parts for your own numbers. Counteroffer writes this for your exact offer.
Frequently asked
Questions people ask about sign-on bonus tax and sign-on bonus negotiation.
How much tax is taken out of a sign-on bonus?
Usually 30 to 40 percent of it. Your employer withholds federal income tax at a flat 22 percent, plus 6.2 percent Social Security and 1.45 percent Medicare, plus your state rate. A 15,000 dollar sign-on for a single filer at 150,000 dollars in a 5 percent state nets about 9,500 dollars. Above 1 million dollars in a year, federal withholding is 37 percent.
Is a sign-on bonus taxed at 22 percent or 40 percent?
Federal withholding is 22 percent, and the 40 percent figure people quote is the total once Social Security, Medicare and state tax are added. The 22 percent is withholding, not your final rate. When you file, the bonus is taxed at your marginal bracket, so you may owe a little more or get some back.
How do I calculate my sign on bonus after taxes?
Subtract federal withholding at 22 percent, Social Security at 6.2 percent (until your wages pass 184,500 dollars in 2026), Medicare at 1.45 percent, and your state rate. The calculator above does it at your real bracket, so it also shows whether the 22 percent withheld is too much or too little.
How much of a sign-on bonus should I ask for?
Enough to replace what you give up by leaving: the bonus you will not collect, RSUs vesting in the next 12 months, unvested 401(k) match and any clawback you owe. Ask for the gross total. For software engineers, Pave data puts the median sign-on near 12.5 percent of base salary, and about 25 percent at the 90th percentile.
Should I ask for a sign-on bonus to cover my unvested RSUs?
Yes, it is one of the most accepted reasons for a sign-on. Count the RSUs that would vest in the next 12 months at the current share price and ask for that amount, as cash, extra new-hire RSUs, or both. Companies are more likely to cover near-term vests than the full four-year balance.
Can I avoid taxes on a sign-on bonus?
Not legally, since it is wages, but you can lower the bite. Contribute more of your new salary to a 401(k) that year, ask for the bonus to be split across two calendar years, or time a large payment into a year when you earn less, such as a start late in the year after a gap.
Is a sign-on bonus paid in the first paycheck?
Often, but not always. Many companies pay it with the first or second paycheck, some after 30 to 90 days, and larger make-whole payments are sometimes split between the start date and month six or twelve. Get the timing in the offer letter, because it decides which tax year the income lands in.
Do I have to pay back a sign-on bonus if I leave?
Usually, if you leave within the commitment period, commonly 12 or 24 months. The agreement sets whether it is the full amount or a prorated share, and whether you repay the gross. Negotiate those terms before you sign, and see the signing bonus tax guide for how repayment interacts with the tax you already paid.
Is a sign-on bonus negotiable?
Yes, and it is often easier to raise than base salary because it is a one-time cost. Companies hold separate sign-on budgets for exactly this. Bring a documented number, the pay you forfeit, and it becomes a cost the recruiter can defend rather than a request for more.
Sources
- IRS Publication 15 (2026), Employer's Tax Guide, supplemental wages and the Social Security wage base
- IRS Publication 525, Taxable and Nontaxable Income, Repayments
- Pave: sign-on bonus benchmarks for software engineers
Figures are estimates and market data changes; verify anything you plan to quote in a negotiation.
What it uses
The features behind sign on bonus calculator.
More use cases
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Counteroffer is educational career coaching, not legal, financial, or HR advice.