The Montana bonus tax calculator at the top of this page helps employers quickly estimate employee take-home pay (also known as net pay) for bonuses. When eligible, it uses the state’s flat 5% supplemental withholding rate.
Behind the numbers
Behind the numbers
Updated: June 24, 2025
Does Montana tax bonuses?
Yes. Montana treats bonuses as regular income and taxes them accordingly. The method for calculating withholding depends on how the bonus is paid:
- If supplemental wages such as bonuses, commissions, or overtime are paid at the same time as regular wages, employers must combine the amounts and use Montana’s withholding tables to determine tax.
If the bonus is paid separately, employers may choose one of the following methods:
- Combine the bonus with regular wages for the current payroll period and use the withholding tables.
- Combine the bonus with regular wages from the most recent payroll period in the same calendar year and apply the tables.
- Withhold a flat 5% from the bonus amount (This rate took effect January 1, 2024 and is still in effect in 2025. For those keeping score, this replaced the prior 6% rate used through 2023).
How to calculate bonus tax in Montana
This can feel like a lot to keep up with but here’s the two ways to do this.
- Was the bonus paid with regular wages? Add both amounts and use Montana’s withholding tables to determine the total withholding.
- Was the bonus paid separately, employers can choose to use either the tables or withhold a flat 5% from the bonus amount.
How can employers in Montana pay bonuses to employees?
Bonuses can be paid via:
- Check
- Direct deposit
- Pay card
How do bonuses work in Montana?
Bonuses are treated the same as other income for withholding and reporting on Form W-2.
Why are bonuses taxed differently than standard pay in Montana?
They aren’t — Montana applies the same tax rules to all wage types.
How much tax is taken out of a bonus in Montana?
Federal: 22%
State: Up to 5.9%
Total: Up to 27.9%