Mega Millions Payout Calculator — Lump Sum vs Annuity After Tax
Enter the Mega Millions advertised jackpot and your tax rates to see the actual cash-option take-home and the 30-year annuity net total — broken down by federal and state taxes.
% of jackpot
%
%
Cash option gross minus federal and state income tax
Cash split
Take-home
58%
Federal tax
37%
State tax
5%
- 1
Cash option (gross)
500,000,000 × 60% ÷ 100 = 300,000,000 - 2
Combined tax rate
37% + 5% = 42% - 3
Tax withheld
300,000,000 × 42% = 126,000,000 - 4
Take-home (lump sum)
300,000,000 − 126,000,000 = 174,000,000
How does this calculator work?
Mega Millions cash option ≈ 60% of advertised jackpot. Subtract federal tax (up to 37% in 2024) and state tax (0–10.9%) to get take-home. The 30-year annuity pays the full jackpot in payments growing 5%/yr but you receive less upfront. Tax rates and the cash-option percentage are editable 2024 estimates — verify current rates before deciding.
Formula
How this is calculated
When you win the Mega Millions jackpot you choose between two payout structures. The annuity option pays the full advertised amount as 30 annual installments, with each payment 5% larger than the previous one (this escalating schedule is set by the Multi-State Lottery Association). The cash (lump-sum) option is the present value of those payments, typically around 60% of the advertised jackpot — the exact percentage fluctuates with prevailing interest rates and is determined at the time of each draw.
Both options are subject to income tax. The US federal government withholds 24% at the time of payment, but lottery winnings are taxed as ordinary income. For jackpot-sized prizes the top federal marginal rate of 37% (as of 2024) applies to most of the winnings, meaning an additional 13% is owed at tax time. State tax is then added on top; rates range from 0% in eight states (including Texas, Florida and California for lottery winnings) to about 10.9% in New York City.
This calculator applies a single combined federal + state rate to the lump-sum gross. The annuity calculation applies the same effective rate to each of the 30 growing payments individually. Tax law changes frequently; the rates shown are editable estimates valid for 2024 and you should verify current rates or consult a tax professional before making financial decisions.
Frequently asked questions
The cash option is the present value of the 30-year annuity, discounted by the current yield on US Treasury securities. When interest rates are high the present value is lower, so the percentage drops. In low-rate environments it can be above 60%. Mega Millions publishes the exact cash value for each drawing.
It depends on your circumstances. The annuity protects against overspending and continues to grow, but you forgo the investment returns you could earn on the lump sum. If you can invest the lump sum at a higher rate than the 5% annuity growth, and manage taxes efficiently, the lump sum wins mathematically. Most financial advisors recommend the lump sum for disciplined investors.
Yes. California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming do not tax lottery winnings at the state level (as of 2024). If you live in one of these states, set the state tax rate to 0%.
Also known as
TG we-Calculate Editorial Team. (2026). Mega Millions Payout Calculator — Lump Sum vs Annuity After Tax [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/mega-millions-payout-calculator
TG we-Calculate Editorial Team. "Mega Millions Payout Calculator — Lump Sum vs Annuity After Tax." TG we-Calculate. 2026. https://we-calculate.com/calculator/mega-millions-payout-calculator.
TG we-Calculate Editorial Team, "Mega Millions Payout Calculator — Lump Sum vs Annuity After Tax," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/mega-millions-payout-calculator
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