Bonus Tax Calculator (2026/27)
Enter your annual salary and your bonus — the calculator works out the extra tax and National Insurance the bonus triggers, and the net amount you actually keep. Because a bonus lands on top of your salary it is taxed at your highest marginal rate, so the result often surprises — including the punishing £100,000–£125,140 taper zone.
How it works
A bonus is not taxed at a special "bonus rate" — it is simply added to your earnings for the year and taxed at your MARGINAL rates. The calculator runs the full 2026/27 tax and NI computation twice (salary alone, then salary + bonus); the difference is the true cost of tax on your bonus.
Because the bonus sits on top of your salary, it is taxed at your highest band: a basic-rate earner keeps roughly 72% of a bonus (20% tax + 8% NI), a higher-rate earner about 58% (40% + 2%), and an additional-rate earner about 53%.
Worked example: on a £35,000 salary, a £5,000 bonus takes you to £40,000 — still inside the basic band, so the bonus loses 20% tax (£1,000) and 8% National Insurance (£400), leaving £3,600 in your pocket: exactly 72%. On a £48,000 salary the same bonus straddles the £50,270 threshold: the first £2,270 is taxed at 20% + 8% and the remaining £2,730 at 40% + 2%, a total deduction of £1,782.20 — the calculator performs this split automatically.
The nasty surprise is the £100,000–£125,140 zone: there the personal allowance tapers away (£1 lost per £2 of income), producing an effective ~62% marginal rate — a £10,000 bonus can leave under £4,000. Salary-sacrificing the bonus into a pension avoids this entirely; see our salary sacrifice calculator.
That ~62% is not an official rate — it is arithmetic. Each £2 of income in the taper zone removes £1 of personal allowance, so a £10,000 bonus at £100,000 income both suffers 40% tax itself and drags £5,000 of previously tax-free allowance into tax at 40% (another £2,000, i.e. 20% of the bonus). Add 2% National Insurance and the combined effect is 62p lost per £1 of bonus.
The result covers income tax and employee National Insurance — the two deductions every cash bonus attracts — and shows the correct position for the tax year as a whole. The deduction on the single payslip in the month the bonus lands is often different, because PAYE annualises that month's pay before correcting itself over the following months. The calculator does not model pension deductions or other items your employer may apply to the same payslip.
FAQ
Why was my bonus taxed so heavily in the month I got it?
PAYE spreads your tax code over the year, so in the month a bonus lands, payroll often assumes you will earn at that higher rate every month and deducts more — sometimes pushing you into a higher band for that period only. Over the following months the cumulative system corrects itself automatically, so the over-deduction comes back in later payslips. This calculator shows the correct full-year position.
What rate of tax do I pay on a bonus?
Your marginal rate — the rate on your top slice of income. In 2026/27 that means 20% tax + 8% NI up to £50,270 total income, 40% + 2% between £50,270 and £100,000, an effective ~62% between £100,000 and £125,140 (personal allowance taper), and 45% + 2% above £125,140. If the bonus straddles a threshold, each part is taxed at its own band — the calculator handles the split exactly.
Can I reduce the tax on my bonus?
The main lever is paying some or all of it into your pension via salary sacrifice or a personal contribution: sacrificed bonus escapes both income tax and NI, so £1 of bonus becomes £1 of pension instead of ~58p of cash for a higher-rate earner. This is especially powerful in the £100k–£125k taper zone, where it also restores your personal allowance and can protect free childcare hours eligibility. Ask your employer before the bonus is processed — it usually cannot be sacrificed retrospectively.
How much of a £5,000 bonus will I actually keep?
Roughly £3,600 if you stay a basic-rate taxpayer (20% tax + 8% NI leaves 72%), about £2,900 at higher rate (40% + 2% leaves 58%), and around £2,650 at additional rate. If the bonus pushes you across a threshold, part is taxed at each band's rate — enter your exact figures to see the precise split rather than relying on a single percentage.
Do I pay National Insurance on a bonus?
Yes — a bonus is earnings, so it attracts employee NI as well as income tax: 8% while your total pay sits below the £50,270 upper earnings limit and 2% above it. This is why a basic-rate earner loses 28% of a bonus rather than just 20%, and a higher-rate earner 42% rather than 40%.
Does a bonus get taxed twice?
No — it can look that way on the bonus-month payslip because PAYE deducts more in that period, but the cumulative system evens out across the year: later payslips deduct correspondingly less, and by year end the total matches the full-year computation this calculator shows. Nothing is taxed twice; the timing of the deduction is simply front-loaded.