Bonus Tax Calculator
A bonus is not taxed under some special, harsher set of rules — it is simply added to your income for the pay period it lands in and taxed at whatever rate applies to that portion of your total earnings. The confusion usually comes from the payslip itself, where a bonus can appear to be taxed unusually heavily, when in fact the maths is exactly the same income tax and National Insurance calculation applied to everything else you earn.
Bonus Tax Calculator
Find out how much of your bonus you'll actually take home after tax and NI for 2026/27.
The Bonus Tax Myth
There is no separate “bonus tax rate” in the UK. A bonus is added to your salary for that pay period and taxed through the same PAYE system, at whatever rate the combined total falls into. If a bonus pushes part of your income into a higher tax band for the first time, only that portion above the threshold is taxed at the higher rate — the rest of your income keeps being taxed exactly as it was before.
This is worth stating plainly because the myth persists widely enough that some people turn down a bonus, or ask for it to be restructured, in the mistaken belief that a large chunk of it will simply disappear at a punitive rate. In reality, even someone moving fully into the 42% combined band on their bonus still keeps 58p of every additional pound — a real reduction, but nowhere near as severe as the “they’ll just tax it all away” assumption sometimes suggests.
Why Your Payslip Might Look Wrong
PAYE assumes your pay in any given period is representative of your pay for the whole year, so a large one-off bonus can temporarily push your monthly figure into a much higher annualised estimate, resulting in more tax being withheld from that one payslip than you will actually owe over the full year. This usually self-corrects automatically in later pay periods, since PAYE operates cumulatively — your total tax paid so far is recalculated against your total income so far at every payslip, so any over-deduction in a bonus month tends to be refunded gradually through lower deductions afterward, or corrected fully at the end of the tax year.
In practice this means the payslip in the month a bonus arrives is rarely the one to judge by — the following month’s payslip, once the cumulative calculation catches up, gives a much better sense of whether the right amount was actually withheld. Anyone who changes jobs, goes on unpaid leave, or otherwise has an unusual pay pattern shortly after a bonus should keep an eye on this, since a change in employer can sometimes interrupt the automatic cumulative correction and leave an overpayment to be reclaimed directly from HMRC instead.
Marginal Rates at a Glance
The rate that actually applies to a bonus depends on where your salary already sits, since the bonus is taxed on top:
| Salary before bonus | Combined rate on the bonus |
|---|---|
| Up to £50,270 | 28% (20% income tax + 8% employee NI) |
| £50,271 to £125,140 | 42% (40% income tax + 2% employee NI) |
| Over £125,140 | 47% (45% income tax + 2% employee NI) |
Anyone whose salary sits close to a threshold should pay particular attention, since a bonus can straddle two bands — part taxed at the lower rate and part at the higher one — rather than the whole amount falling neatly into a single rate.
Student loan repayments sit on top of this and are worth factoring in separately — a bonus counts as income for student loan purposes too, so anyone still repaying a plan will see an additional 9% deducted from the portion of the bonus above their plan’s monthly threshold, on top of whichever combined tax and NI rate applies from the table above.
Two Salaries, Same Bonus
On a salary of £45,000 receiving a £5,000 bonus, the whole bonus falls within the basic rate band, since £45,000 plus £5,000 stays under the £50,270 threshold — taxed at the combined 28% rate, leaving a net bonus of around £3,600.
On a salary of £48,000 receiving the same £5,000 bonus, the picture changes: £2,270 of the bonus keeps the account under £50,270 and is taxed at 28%, while the remaining £2,730 pushes into the higher band and is taxed at 42% — a blended rate across the whole bonus that sits somewhere between the two, rather than either rate applying to the full amount.
Softening the Impact
The most direct way to reduce tax on a bonus is to sacrifice some or all of it into a workplace pension before it is paid, since a genuine salary sacrifice arrangement removes that amount from taxable income entirely rather than taxing it and then contributing what is left. This is particularly effective for anyone whose bonus would otherwise push part of their income above £100,000, since it also avoids triggering the Personal Allowance taper on that portion. Our Salary Sacrifice Calculator shows the exact tax saving for a given sacrifice amount, and our Overtime Pay Calculator uses the same marginal-rate approach if you are trying to work out the net value of extra hours rather than a lump-sum bonus.
Frequently Asked Questions
Is a bonus really taxed more than salary?
No — a bonus is taxed at the same rates as any other income, using the same tax bands. It can feel like it is taxed more heavily because it often pushes part of your income into a higher band for that pay period, but the underlying rates are identical.
Will I get overpaid tax back automatically?
In most cases, yes. PAYE recalculates your tax cumulatively at each payslip, so an apparent overpayment in a bonus month is usually corrected through your normal pay in the following months, or reconciled automatically at the end of the tax year.
Does National Insurance apply to bonuses the same way?
Yes — employee National Insurance is calculated on a bonus in the same way as regular salary, at 8% up to the upper earnings threshold and 2% above it, alongside income tax.
Can my employer choose to tax my bonus differently?
No — employers must apply HMRC’s standard PAYE rules to bonus payments in the same way as regular pay. Any apparent difference comes from how PAYE annualises a single pay period, not from a different rate being applied deliberately.
What if my bonus is paid separately from my normal salary?
It makes no difference to the tax owed whether a bonus is paid alongside your regular salary or as a separate payment in the same month — PAYE treats both as part of the same period’s total taxable pay.
Does a bonus affect my Personal Allowance?
It can, if it pushes your total taxable income above £100,000 — the Personal Allowance starts tapering down above that threshold, which can increase the effective rate on part of a bonus beyond the standard bands shown above.
Important Information
This calculator provides an estimate based on standard 2026/27 PAYE rates for general information purposes only and does not constitute tax advice. It assumes a standard tax code and does not account for benefits in kind, a non-standard tax code, or multiple income sources. For advice specific to your circumstances, consult HMRC or a qualified accountant. See our Disclaimer for further information.