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Bonus Tax Calculator UK 2026/27

See exactly how much income tax, National Insurance, and student loan you'll pay on your bonus — plus model pension sacrifice to reduce your tax bill.

Bonus Tax Calculator

Estimate the tax on your bonus for the 2026/27 tax year.

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Advanced Settings

Employer adds their 15% NI savings.

Calculate NI on monthly basis.

Bonus Breakdown

An estimate of what you'll take home from your bonus.

Take-Home From Bonus

£5,837.80

Effective Deduction Rate41.6%(Moderate)

Gross Bonus

£10,000.00

Income Tax

-£3,946.00

National Insurance

-£216.20

Total Deductions

-£4,162.20

Income Tax Band Breakdown

BandTaxedTax Paid
Income Tax Slice£10,000£3,946

Tax Tips & Updates

Join thousands of UK employees getting weekly tax saving tips, salary insights, and financial updates.

Net Bonus

£5,837.80

How Your Bonus is Taxed

Bonuses are taxed as regular income under PAYE — but because your salary uses up the lower bands first, the effective rate on your bonus is often surprisingly high.

Income Tax on Bonuses

Your bonus is added to your total annual income.

Your bonus isn't taxed separately — it's stacked on top of your salary, and the total determines which tax bands apply. If your salary has already filled the basic rate band, your entire bonus may be taxed at 40% or 45%.

This can mean that even a modest bonus crosses a band boundary, with part taxed at 20% and the rest at 40%. Our calculator's tax band table shows the exact split.

National Insurance on Bonuses

Bonuses are also subject to NI contributions.

NI is calculated per pay period. When your bonus arrives in the same month as your salary, your combined pay for that month is higher, increasing your NI bill for that period.

The rate is 8% on earnings between £12,570 and £50,270, and 2% above that. Pension salary sacrifice is the only way to avoid NI on your bonus.

Worked Examples

Real-world scenarios showing how different income levels affect your bonus take-home.

~28% effective rate

Basic Rate Taxpayer

Salary£30,000
Bonus£5,000
Tax + NI deducted~£1,400
Take-home~£3,600

Most of the bonus falls in the 20% basic rate band, plus 8% NI.

~44% effective rate

Higher Rate — Band Crossing

Salary£48,000
Bonus£5,000
Tax + NI deducted~£2,200
Take-home~£2,800

The bonus straddles the £50,270 threshold — some taxed at 20%, some at 40%, plus NI.

~62% effective rate

Additional Rate + PA Taper

Salary£110,000
Bonus£20,000
Tax + NI deducted~£12,400
Take-home~£7,600

Income crosses £125,140, losing the Personal Allowance entirely — effective rate hits ~60%+.

How to Reduce Tax on Your Bonus

Legitimate strategies to keep more of your bonus.

Most effective

Pension Sacrifice

Redirect all or part of your bonus directly into your pension. Pension salary sacrifice avoids both income tax and NI — the most powerful tax reduction available. Use the slider in our calculator above to model different amounts.

High earners

Avoid the 60% Trap

If your salary + bonus exceeds £100,000, you enter the Personal Allowance taper zone. Consider pension sacrifice to bring your income below £100,000 and reclaim your full £12,570 allowance.

Tax relief

Charitable Giving (Gift Aid)

Donating to charity via Gift Aid extends your basic rate band. For each £80 donated, the charity claims £20 from HMRC — and if you're a higher-rate taxpayer, you can claim the additional 20% back as a tax reduction.

Employer schemes

Salary Sacrifice Benefits

Employers often offer salary sacrifice schemes for cycle-to-work, electric cars, or childcare vouchers. These reduce your gross salary (and therefore your taxable income) before the bonus is considered.

2026/27 Income Tax Bands

Current tax rates used in our calculations.

England, Wales & Northern Ireland

BandIncomeTax RateNI Rate
Personal AllowanceUp to £12,5700%
Basic Rate£12,571 – £50,27020%8%
Higher Rate£50,271 – £125,14040%2%
Additional RateOver £125,14045%2%

Scotland

BandIncomeRate
Personal AllowanceUp to £12,5700%
Starter Rate£12,571 – £15,39719%
Basic Rate£15,398 – £26,56120%
Intermediate Rate£26,562 – £43,66221%
Higher Rate£43,663 – £75,00042%
Advanced Rate£75,001 – £125,14045%
Top RateOver £125,14048%

Frequently Asked Questions

Are bonuses taxed at a higher rate in the UK?
Not technically — bonuses are taxed as regular income under PAYE. However, because your salary has already used up your Personal Allowance and lower tax bands, your bonus is often taxed entirely at your highest marginal rate (e.g. 40% or even 45%), which makes it feel like a higher rate.
Can I put my bonus into my pension to avoid tax?
Yes — salary sacrifice into a pension is the most effective way to reduce (or even eliminate) tax on your bonus. Pension contributions reduce your taxable income, so both income tax and National Insurance are lower. Use the pension sacrifice slider above to model the effect.
Does my bonus affect my Personal Allowance?
Yes, if your total income (salary + bonus) exceeds £100,000. The Personal Allowance tapers by £1 for every £2 over £100,000, disappearing completely at £125,140. This creates an effective 60% tax rate on income between those thresholds.
What is the 60% tax trap?
If your income is between £100,000 and £125,140, you lose £1 of Personal Allowance for every £2 earned. This means you effectively pay 60% tax on that slice of income (40% income tax + 20% from the lost allowance). Pension sacrifice is the main way to avoid this.
How does National Insurance on bonuses work?
NI is calculated on a per-pay-period basis. When your bonus is paid in the same month as your salary, your combined earnings for that period are higher, so you'll pay more NI. The standard rate is 8% between the Primary Threshold (£12,570) and Upper Earnings Limit (£50,270), and 2% above that.
Can I split my bonus across two tax years?
This depends on your employer. Some employers will defer payment to the next tax year, which can help if you're near a tax band boundary. It's worth discussing with HR or payroll before the tax year end (5 April). Note: the bonus is taxed in the year it's received, not earned.
Is there anything else deducted from my bonus besides tax?
If you have a student loan, repayments are also calculated on your total annual income including the bonus — so you may see a higher student loan deduction in the month your bonus is paid. Pension contributions (if not salary sacrifice) are deducted separately and come from post-tax income.

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