The Nebraska bonus tax calculator at the top of this page helps employers quickly estimate employee take-home pay (also known as net pay) for bonuses.
Behind the numbers
Behind the numbers
Updated: July 11, 2025
Does Nebraska tax bonuses?
Yes. Nebraska includes bonuses in gross income and requires income tax withholding. For supplemental wages — including bonuses, commissions, overtime, severance pay, and sales awards — the withholding method depends on how the payment is issued:
If paid at the same time as regular wages: Combine the amounts and calculate withholding using the standard wage bracket or percentage method based on the employee’s Form W-4N.
Was the bonus paid separately? Employers may:
- Combine the bonus with wages from the current or prior payroll period (within the same calendar year) and use the tax tables, or
- Withhold a flat 5% from the bonus amount.
How to calculate bonus tax in Nebraska
Employers can calculate withholding in one of two ways:
- If the bonus is paid with regular wages, combine both and apply the standard Nebraska withholding tables based on the employee’s Form W-4N.
- If the bonus is paid separately, employers can choose to apply a flat 5% withholding rate or use the aggregate method as described above.
How can employers in Nebraska pay bonuses to employees?
Bonuses can be paid via:
- Check
- Direct deposit
- Pay card
How do bonuses work in Nebraska?
Bonuses are subject to the same withholding and reporting requirements as wages and should be reported on Form W-2.
What is the bonus tax rate in Nebraska?
Nebraska’s tax rates range from 2.46% to 6.64%, depending on income level.
Why are bonuses taxed differently than standard pay?
They aren’t — Nebraska applies the same progressive rates to all income.
How much tax is taken out of a bonus in Nebraska?
- Federal: 22%
- State: Up to 6.64%
- Combined: Up to 28.64%
Resources for Nebraska employers
- Nebraska Department of Revenue
- Nebraska Withholding Allowance Certificate
- Information on income tax withholding