Bonus tax calculator 2026/27

Why a bonus feels so heavily taxed

There is no special "bonus tax". A bonus is simply added to your income for the year and taxed at your marginal rate — the rate on your top slice of pay. If you are a higher-rate taxpayer, that means 40% Income Tax plus 2% National Insurance on the bonus: 42% gone before it reaches you. If the bonus pushes your total over £100,000, the Personal Allowance taper can take an effective 60%.

Your payslip can make it look even worse for one month, because PAYE often taxes a one-off bonus as if you earned that much every month — but it evens out over the year, and this calculator shows the true annual position. If you are still repaying a student loan, that takes another 9% of the bonus above your threshold.

The cleanest way to keep a higher-rate bonus is to pay it into a pension by salary sacrifice — that avoids both the Income Tax and the National Insurance. For your full pay picture, use the main take-home calculator.

Bonus tax questions

Why is my bonus taxed so heavily?

A bonus sits on top of your salary, so it is taxed at your highest (marginal) rate — often 40% plus 2% National Insurance, or more if it tips you into the £100,000 trap. It is not a special bonus tax; it is just taxed at the top of your income.

Will my bonus push me into a higher tax band?

It can. If your salary plus bonus crosses £50,270, the part above is taxed at 40%; crossing £100,000 starts withdrawing your Personal Allowance (an effective 60%).

Can I avoid tax on my bonus?

Paying your bonus into a pension by salary sacrifice avoids Income Tax and National Insurance on it entirely — a popular move for higher-rate bonuses. See the salary-sacrifice calculator.

Does a student loan come off my bonus too?

Yes — if you are repaying a student loan, 9% (or 6% for postgraduate) of the bonus above your threshold is deducted as well, on top of tax and NI.