Bonus Tax Calculator (2025/26)
How it works
Your bonus is added to your year-to-date earnings and taxed at whatever rate it falls into. If it tips you over £50,270, the part above is taxed at 40%; over £100k triggers personal allowance taper (effective 60%). Salary sacrificing the bonus into a pension avoids all those deductions.
Worked example
£60k salary + £10k bonus, no student loan.
- Bonus all in 40% band → £4,000 tax
- NI 2% → £200
- Take home: £5,800 (58%)
Who should use this
- •Anyone receiving an annual or one-off bonus
- •Higher-rate earners considering bonus sacrifice
- •Sales staff with variable commission
- •People near the £100k or £50k threshold
Common mistakes
- ×Thinking the month's bonus is taxed at a special 'bonus rate' (it's not — it's just marginal rate)
- ×Not checking if it pushes you into the £100k trap
- ×Forgetting student loan applies to bonuses too
- ×Missing the bonus sacrifice opportunity if your employer offers it
Frequently asked questions
Is bonus taxed at 40% automatically?▾
No — only the portion that falls into the 40% band is. The rest is taxed at your normal marginal rate.
Can I sacrifice my bonus into pension?▾
Most employers allow this if requested before the bonus is paid. It avoids tax, NI and student loan — very tax-efficient.
Why was so much tax taken from my bonus month?▾
PAYE estimates your annual income from each month's pay. A big bonus month makes it think you'll earn more, so it over-deducts. It rebalances over the year.
Does bonus count for pension contributions?▾
Yes — bonus is pensionable for most workplace schemes, often up to a cap.
What about a sign-on bonus?▾
Treated the same way as any other bonus — taxed in the month received.
Are bonuses subject to student loan?▾
Yes — student loan deduction is calculated each pay period on total pay including bonus.