Bonus Tax Calculator UK

Getting a bonus is good news, until you see how much of it disappears in tax. A lot of people assume bonuses are taxed at a special, higher rate. They aren't. A bonus is simply added to your normal pay for that period and taxed using the same Income Tax and National Insurance rules as the rest of your salary. It just often lands in one lump sum, which is where the confusion (and sometimes the shock) comes from.

This calculator works out what you'll actually take home from a bonus, using current 2026/27 tax year rates (6 April 2026 to 5 April 2027).

How bonus tax actually works

When your employer pays you a bonus, it's added to whatever else you're paid in that pay period, then taxed as one combined amount. There's no separate "bonus tax rate". The rates that apply are the same ones that apply to the rest of your income:

On top of Income Tax, employee National Insurance applies at 8% on earnings between £242 and £967 a week (or £1,048 to £4,189 a month), and 2% on anything above that.

Because tax is worked out on your total income for the year, not on the bonus in isolation, where your bonus "sits" depends on how much you've already earned. If your salary alone uses up most of your basic rate band, a large bonus can tip part of it into the 40% higher rate band, even though your day-to-day salary never goes near that threshold.

Worked example

Say you earn a salary of £38,000 a year and receive a £5,000 bonus in one month.

• Your total income for the year becomes £43,000, still comfortably within the basic rate band (up to £50,270)
• So the whole £5,000 bonus is taxed at 20% Income Tax = £1,000
• Employee National Insurance is calculated for the bonus month, adding roughly £161 because earnings above the monthly upper earnings limit are charged at 2%
• Take-home from the bonus: approximately £3,839, out of the original £5,000

Now compare that with someone earning £48,000 a year who gets the same £5,000 bonus:

• Their salary alone is close to the £50,270 higher rate threshold
• Around £2,270 of the bonus stays in the basic rate band (taxed at 20%)
• The remaining £2,730 tips over into the higher rate band (taxed at 40%)
• Monthly employee NI on the bonus is roughly £111, so take-home from the bonus is about £3,343

This is why two people can get the same size bonus and end up with very different amounts in their pocket, it depends entirely on where the rest of their salary sits relative to the tax bands.

Why a bonus can look "over-taxed" on your payslip

PAYE (Pay As You Earn) calculates tax on a cumulative basis across the year, but it does this per pay period using an assumption that whatever you're paid this month, you'll be paid every month. If your bonus is paid as a one-off lump sum on top of your normal salary, HMRC's system can temporarily behave as though you earn that combined amount every single month, pushing more of your income into higher bands than you'll actually owe for the year as a whole.

In practice, this usually corrects itself. Once the bonus month passes and your pay returns to normal, the PAYE system recalculates and you typically get some of that "extra" tax back automatically, either spread across the following months' payslips or as a lump sum if it's close to the end of the tax year. If it doesn't correct itself by the time you get your P60, you can query it with HMRC or check your position through your personal tax account on gov.uk.

Bonus sacrifice into your pension

Some employers let you sacrifice some or all of a bonus into your pension instead of taking it as cash. Because pension contributions made this way come off your gross pay before tax and National Insurance are calculated, this can significantly increase how much of your bonus actually ends up working for you, rather than going to HMRC. Use the bonus sacrifice field in this calculator to compare taking the bonus as cash with redirecting part or all of it to pension. It's also worth asking your employer or payroll team whether this is an option, particularly if a bonus would otherwise push you into a higher tax band.

Bonuses and student loan repayments

If you repay a student loan through PAYE, a bonus can increase the repayment taken from that payslip because repayments are based on earnings in the pay period. A one-off bonus may push that month's pay above your plan threshold even if your normal monthly salary is below it. Use the Student Loan Repayment Calculator alongside this page if student loan deductions matter for your take-home bonus.

Bonuses and the £100,000 tapered Personal Allowance trap

If a bonus takes your total income above £100,000, be aware this can trigger other effects depending on your circumstances, including the tapering of tax-free childcare and free childcare hours, and the High Income Child Benefit Charge if you or your partner claim Child Benefit. These aren't part of this calculator's output but are worth checking separately if a bonus pushes your income into that territory.

Scotland and Wales

This calculator uses the rest-of-UK (England and Northern Ireland) tax bands. Scotland has its own Income Tax bands and rates, which differ from the rest of the UK, so Scottish taxpayers should use HMRC's Scottish rate tables or the official gov.uk calculator for an accurate figure. Wales uses the same bands as England and Northern Ireland.

This is general guidance based on 2026/27 tax rates and isn't financial advice. For anything specific to your own payslip or tax position, check your personal tax account on gov.uk or speak to HMRC or an accountant.