How much tax will I pay on my bonus?

A bonus is taxed as ordinary pay, at the rates your salary plus bonus reach. The tax on it is the tax on your salary plus bonus minus the tax on your salary alone. On a £45,000 salary, a £10,000 bonus costs £2,946.00 in income tax for 2026/27, because £4,730 of it is above the £50,270 higher rate threshold. With National Insurance worked out in the month it is paid, you keep about £6,827.66.

Why was so much tax taken from my bonus?

With a cumulative tax code such as 1257L, payroll works out the tax due on all your pay so far this year using one twelfth of your allowance and bands per month. A bonus month pushes more of your year-to-date pay into the higher rate band, so the deduction looks high. Later months give it back gradually, and by the end of the tax year the total matches what is actually due. On an emergency code marked W1, M1 or X the month is taxed on its own, and HMRC usually puts any overpayment right after the year end.

How is National Insurance worked out on a bonus?

Employee NI is worked out separately for each pay period, not over the year, and a bonus counts as pay in the period it is paid. For monthly pay in 2026/27 you pay 8% between £1,048 and £4,189 a month and 2% above that. A large bonus month therefore pays 2% on most of the bonus, and this is not recalculated at the year end. For the £45,000 example the NI on a £10,000 bonus is £226.34, not the £516.20 an annual calculation gives.

Will my bonus push me into a higher tax bracket?

Only the part of the bonus above a threshold is taxed at the higher rate. In England, Wales and Northern Ireland the higher rate of 40% starts at £50,270. Your salary is not retaxed, so a bonus always leaves you better off than no bonus.

What is the 60% tax trap on a bonus?

Between £100,000 and £125,140 of adjusted net income you lose £1 of Personal Allowance for every £2 earned, so that slice is taxed at an effective 60%, or 62% with NI. A £25,140 bonus on a £100,000 salary costs £15,586.80 in tax and NI. PAYE on a standard code does not remove the allowance in-year, so about £5,028.00 of that is usually collected later.

Can I put my bonus into my pension to avoid tax?

Yes, if your employer offers bonus sacrifice. You agree before the bonus is paid to swap some or all of it for an employer pension contribution, so you pay no income tax, employee NI or student loan on that part, and your employer saves 15% employer NI, which some add to your pension. It also reduces adjusted net income, which can restore your Personal Allowance or reduce the High Income Child Benefit Charge between £60,000 and £80,000.

Bonus Tax Calculator 2026/27

Name: UK Bonus Tax Calculator
Author: Alexandre Bernier

See the real income tax, National Insurance and student loan on your bonus, what lands in your bank, and how your bonus month payslip will look.

Last updated: October 2026 · 2026/27 tax rates

Salary and bonus

Annual salary (before bonus)

Bonus amount (gross)

Month the bonus is paid

Assumes you are paid monthly. Tax year months run from April.

Scottish taxpayer

Pension and student loan

Regular pension contribution

Student loan plan

Postgraduate loan

Bonus sacrifice

Amount of bonus paid into your pension

Share of employer NI saving your employer adds (%)

Employers save 15% NI on sacrificed pay. Some pass part or all of it on; 0% if yours does not.

Take-home from your bonus

£6,827.66

of £10,000.00 paid as cash · effective rate 31.7% on the bonus

Income tax

£2,946.00

National Insurance

£226.34

Student loan

£0.00

Higher rate: £4,730 of your bonus sits above the £50,270 higher rate threshold, so it is taxed at the higher rate rather than the rate on your salary.

Tax on the bonus over the year

	Salary alone	Salary + bonus	On the bonus
Income tax	£6,486.00	£9,432.00	£2,946.00
NI (annualised)	£2,594.40	£3,110.60	£516.20
Student loan (annualised)	£0.00	£0.00	£0.00
Adjusted net income	£45,000	£55,000

Bonus take-home if NI were worked out on the year£6,537.80

Bonus take-home with NI and student loan worked out per pay period (actual)£6,827.66

NI is worked out month by month, not over the year. In December your pay is above the monthly upper earnings limit of £4,189, so more of the bonus pays NI at 2% instead of 8%. That is why the actual NI is £289.86 lower than the annualised figure. It is not adjusted at the year end.

Bonus month payslip (December)

Tax code 1257L on the cumulative basis, monthly NI thresholds of £1,048 and £4,189.

	Normal month	Bonus month
Gross pay	£3,750.00	£13,750.00
PAYE income tax	£540.50	£3,750.00
National Insurance	£216.16	£442.50
Student loan	£0.00	£0.00
Net pay (after pension)	£2,993.34	£9,557.50

Extra PAYE in December: £3,209.50, against £2,946.00 of tax actually due on the bonus over the year. The extra is handed back gradually in the months that follow, because the cumulative code catches up.

How bonus tax works in 2026/27

There is no separate bonus tax rate in the UK. A bonus is ordinary employment income, so it is added to your salary and taxed through PAYE at whatever rates your total income reaches. The fair way to measure the tax on a bonus is the difference between the tax on your salary plus bonus and the tax on your salary alone. That is the figure this calculator shows as the tax on the bonus.

Worked example: on a £45,000 salary, income tax is £6,486.00. Add a £10,000 bonus and the tax on £55,000 is £9,432.00, because the part above £50,270 is taxed at 40%. The bonus costs £2,946.00 in income tax. Worked out over the year, NI on the bonus would be £516.20, leaving £6,537.80. Paid in one month, the real NI is £226.34, so you actually keep £6,827.66.

A bonus that takes you over a threshold is not taxed at the higher rate in full: only the slice above the threshold is. A bonus never leaves you with less take-home than no bonus at all, but the Personal Allowance taper and the Child Benefit charge described below can push the effective rate on part of it far above the headline rates.

Most employees have a cumulative tax code such as 1257L. Each month payroll works out the tax due on your total pay so far this tax year, using one twelfth of your Personal Allowance and tax bands for every month that has passed, and deducts the difference from what you have already paid. In a bonus month your pay to date jumps, so more of it is pushed above the pro-rata higher rate threshold and the deduction looks steep.

Because the calculation is cumulative, the following months use the unused band that builds up again each month, and your tax drops a little until the year balances. By 5 April the total PAYE matches the annual figure, provided you stay in the job. A bonus paid in March, the last month of the tax year, is taxed at exactly the annual figure straight away, because month 12 uses the full year's allowance and bands.

If you are on an emergency or non-cumulative code (shown with W1, M1 or X), each month is taxed on its own and a bonus month can be genuinely over-taxed. HMRC normally refunds or adjusts this after the year end, or you can check your code in your personal tax account.

Class 1 NI is not cumulative for employees. Each pay period is assessed on its own, and HMRC treats a one-off bonus as part of your pay in the period it is paid. For monthly pay in 2026/27 you pay 8% on earnings between £1,048 and £4,189 a month, and 2% on anything above.

So a big bonus month pays 2% on the part above the monthly upper earnings limit, even if your annual pay never reaches £50,270. That is not refunded or topped up at the year end. For most people below the annual limit, the result is less NI on a bonus than an annual calculation suggests: £226.34 instead of £516.20 in the £45,000 example. Company directors are the exception, as their NI is worked out on an annual earnings period.

Student loan deductions are also worked out per pay period, using one twelfth of the annual threshold. If your salary is already above the monthly threshold, the bonus simply adds 9% (6% for a postgraduate loan) of the bonus, the same as an annual calculation. If your total income for the year ends up below your plan threshold, you can ask the Student Loans Company for a refund. See the student loan calculator for the long-term picture.

Related calculators

Other free UK tools that follow on from this calculation.

Salary Calculator

Annual, monthly and weekly take-home pay after PAYE, NI, pension and student loan.

Salary Sacrifice Calculator

How much pension you actually buy for every pound of take-home pay you give up.

HICBC Calculator

High Income Child Benefit Charge between £60k and £80k of adjusted net income.

Pension Carry Forward Calculator

Unused annual allowance from the last three years, and how much you can pay in this year.

Reviewed by Alexandre Bernier, LLM (UK), CFP®

Educational tool: estimates only. Not individual financial, investment, tax or legal advice. Using it does not create an adviser-client relationship. Rules and figures change; check them against current HMRC and GOV.UK guidance and speak to a qualified professional. Editorial policy →

Sources

Every rate and threshold used by this calculator is taken from the official pages below. If a figure here disagrees with one of these, the official page is right, please tell us.