State Supplemental Withholding Rates (2026)
For payments made in 2026, state withholding on bonuses and RSU vests ranges from 0% in nine no-tax states to 11.7% in New York (10.23% in California for equity and bonuses), with most states between 3% and 6%.
When an employer pays supplemental wages — bonuses, commissions, RSU vests, severance — most states let payroll withhold at a single published flat rate instead of running the payment through the regular wage tables. The table below lists that rate for every state and the District of Columbia for 2026. Where a state publishes no separate rate, the table shows how the state handles supplemental pay instead: flat-tax states simply apply their flat rate to everything, and aggregate-method states fold the payment into regular wages.
| State | Supplemental rate (%) | How it applies | 2026 notes |
|---|---|---|---|
| Alabama | 5.00 | Flat supplemental rate | |
| Alaska | — | No state income tax | |
| Arizona | — | Employee-elected percentage | Employee picks 0.5%–3.5% on Form A-4; flat income tax is 2.5%. |
| Arkansas | 3.90 | Flat supplemental rate | |
| California | 10.23 / 6.60 | Flat supplemental rate | 10.23% for bonuses and stock compensation (RSUs, options); 6.6% for other supplemental wages (EDD DE 44). |
| Colorado | 4.40 | Flat income tax applies | |
| Connecticut | — | Aggregate method | Top marginal rate 6.99%. |
| Delaware | — | Aggregate method | Top marginal rate 6.6%. |
| District of Columbia | — | Aggregate method | Top marginal rate 10.75%. |
| Florida | — | No state income tax | |
| Georgia | 4.99 | Flat income tax applies | HB 463 (signed May 11, 2026) cut the rate from 5.19% to 4.99% retroactive to Jan 1, 2026. |
| Hawaii | — | Aggregate method | Top marginal rate 11%. |
| Idaho | 5.30 | Flat supplemental rate | Flat option; employers may instead combine with regular wages. |
| Illinois | 4.95 | Flat income tax applies | |
| Indiana | 2.95 | Flat income tax applies | Cut from 3.00% for 2026; county income taxes (roughly 0.5%–3%) apply on top. |
| Iowa | 3.80 | Flat supplemental rate | Matches Iowa's 3.8% flat income tax. |
| Kansas | 5.00 | Flat supplemental rate | Flat option for separately paid supplemental wages; top bracket 5.58%. |
| Kentucky | 3.50 | Flat income tax applies | Cut from 4.0% effective Jan 1, 2026. |
| Louisiana | 3.00 | Flat income tax applies | |
| Maine | 5.00 | Flat supplemental rate | Flat option; top marginal rate 7.15%. |
| Maryland | — | Aggregate method | Withhold at the employee's rate plus a county rate (2.25%–3.30%); no single statewide supplemental rate. |
| Massachusetts | 5.00 | Flat income tax applies | The 4% surtax on income over roughly $1.1M (indexed) is settled at filing, not withheld at a supplemental rate. |
| Michigan | 4.25 | Flat income tax applies | |
| Minnesota | 6.25 | Flat supplemental rate | |
| Mississippi | 4.00 | Flat income tax applies | Cut from 4.4% effective Jan 1, 2026 — final step of the scheduled phase-down. |
| Missouri | 4.70 | Flat supplemental rate | |
| Montana | 5.00 | Flat supplemental rate | Flat 5% option per Montana Publication 1; top marginal rate fell to 5.65% in 2026. |
| Nebraska | 3.50 | Flat supplemental rate | Cut from 5% in the 2026 Circular EN as the top rate fell to 4.55%. |
| Nevada | — | No state income tax | |
| New Hampshire | — | No state income tax on wages | Interest & dividends tax repealed effective Jan 1, 2025. |
| New Jersey | — | Aggregate method | Top marginal rate 10.75%. |
| New Mexico | 5.90 | Flat supplemental rate | |
| New York | 11.70 | Flat supplemental rate | NYC residents add 4.25%; Yonkers residents add 2.30815%. |
| North Carolina | 4.09 | Flat supplemental rate | Statutory withholding = 3.99% income tax rate + 0.10 point cushion (NC-30). |
| North Dakota | 1.50 | Flat supplemental rate | Top marginal rate 2.5%. |
| Ohio | 2.75 | Flat supplemental rate | Reduced from 3.5% when Ohio moved to a flat 2.75% income tax for 2026. Municipal income taxes apply on top. |
| Oklahoma | 4.50 | Flat supplemental rate | Top rate cut from 4.75% effective Jan 1, 2026. |
| Oregon | 8.00 | Flat supplemental rate | Top marginal rate 9.9%. |
| Pennsylvania | 3.07 | Flat income tax applies | Local earned income taxes apply on top. |
| Rhode Island | 5.99 | Flat supplemental rate | |
| South Carolina | — | Aggregate method | H.4216 (signed Mar 30, 2026) set the top rate at 5.21% retroactive to Jan 1, 2026; the withholding tables issued in late 2025 used the prior 6.0% schedule. |
| South Dakota | — | No state income tax | |
| Tennessee | — | No state income tax on wages | Hall tax fully repealed in 2021. |
| Texas | — | No state income tax | |
| Utah | 4.50 | Flat income tax applies | |
| Vermont | — | Percent of federal withholding | 30% of the federal withholding on the payment (6% for nonqualified deferred compensation). |
| Virginia | 5.75 | Flat supplemental rate | |
| Washington | — | No state income tax on wages | Long-term capital gains excise: 7% above the standard deduction ($278,000 for 2025, indexed), plus 2.9% on gains over $1M. See the no-income-tax states table. |
| West Virginia | — | Graduated formula | Supplemental wages withheld under the graduated tables; top rate 4.82%. |
| Wisconsin | 3.54–7.65 | Graduated by annual wages | Rate depends on the employee's annual wage level. |
| Wyoming | — | No state income tax |
Verified as of July 13, 2026, for wages paid in calendar year 2026. Compiled from state withholding guides and cross-checked against EY's 2026 state supplemental rate survey and Patriot Software's 2026 chart. State-specific sources: California EDD DE 44, New York DTF withholding rates, Montana Publication 1 (2026), Nebraska 2026 Circular EN, Georgia HB 463, South Carolina H.4216.
Reading the table
The rate shown is what payroll takes out when the payment happens — it is not your tax rate. A state supplemental rate can overshoot or undershoot your real marginal rate, and the difference washes out on your state return. New York's 11.7% deliberately overshoots for most filers (the state's top rate below $1.08M of income is lower), while a flat 5% in a state with a 7.15% top bracket, like Maine, can leave high earners short.
Structurally, states fall into four groups. Sixteen states publish a true flat supplemental rate. Ten flat-tax states need no separate rate — the single rate hits everything. About a dozen aggregate-method states (including New Jersey, Connecticut, Maryland, and D.C.) fold the bonus into the regular paycheck calculation, so withholding depends on your W-4 equivalent and pay frequency. And nine states tax no wages at all.
2026 was an unusually busy year for this table. Nine states cut rates effective January 1 (Georgia, Indiana, Kentucky, Mississippi, Montana, Nebraska, North Carolina, Ohio, Oklahoma), and two of the cuts landed retroactively mid-year: South Carolina's H.4216 in March and Georgia's HB 463 in May, both effective back to January 1, 2026. Nebraska's supplemental rate fell the furthest, from 5% to 3.5%. If your payroll department withheld at an early-2026 rate that was later cut, you were slightly over-withheld — the difference comes back on your state return.
Remember that state withholding stacks on top of federal: the 22% federal supplemental rate (37% above $1 million), 6.2% Social Security up to the wage base, and 1.45% Medicare all come out of the same payment. For a California RSU vest, total withholding typically runs around 40% — and can still be short of the true liability if you are in the 35% or 37% federal bracket. The safe-harbor thresholds table covers what to do about that.
Withholding defaults are general reference information, not tax advice, and states revise them — confirm current figures with the linked primary sources or a qualified tax professional.
Common questions
- Which state has the highest bonus withholding rate?
- New York, at 11.7% — and New York City residents add another 4.25%, for 15.95% combined. Among stock compensation specifically, California's 10.23% rate on bonuses and equity is the highest single statewide rate.
- How much is RSU withholding in California?
- California withholds 10.23% of RSU and bonus income for state tax (EDD DE 44), on top of the 22% federal supplemental rate, 6.2% Social Security (up to the wage base), and 1.45% Medicare. Other supplemental wages such as overtime use a 6.6% state rate.
- What states have no tax on bonuses?
- Nine states withhold no state income tax from wages of any kind: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Federal withholding still applies everywhere.
- Are RSUs withheld at the same state rate as bonuses?
- Usually yes — most states treat RSU vests as supplemental wages, the same category as bonuses. California is the notable exception in structure: it applies the same 10.23% rate to both bonuses and stock compensation but a lower 6.6% rate to other supplemental pay like overtime.
- Is the supplemental withholding rate my actual state tax rate?
- No. It is a payroll default. Your actual liability is computed on your state return at your real marginal rates; the difference becomes a refund or a balance due.