Bonus Tax Calculator UK
Find out exactly how much of your UK bonus you'll actually take home after income tax and National Insurance — calculated instantly in your browser.
Your details
How bonus tax works in the UK.
In the UK, a bonus is treated as ordinary income in the pay period it is paid. Your employer adds it to your regular salary for that month and applies PAYE tax and National Insurance on the combined total — the same as if you'd earned that much every month.
Example: £45,000 salary + £5,000 bonus (annual)
Notice that the effective tax rate on the bonus itself was 28% (£1,000 tax + £400 NI on a £5,000 bonus) — because the bonus kept the salary just under the Higher Rate threshold. If the bonus had pushed above £50,270, the portion over the threshold would be taxed at 42% (40% tax + 2% NI).
Ways to reduce bonus tax
- Salary sacrifice: Ask your employer to pay the bonus directly into your pension. You save both income tax and NI on the entire amount.
- Spread it: Some employers will split a large bonus across two pay periods (e.g. December and January) so less of it is taxed at the higher rate.
- Check your tax code: An incorrect tax code can mean you overpay on your bonus. Use our tax code checker to verify.
- Claim back overpaid tax: HMRC corrects overpayments automatically each tax year, but you can also submit a self-assessment or claim directly.
Bonus tax questions answered.
How is tax calculated on a UK bonus?
Your bonus is added on top of your regular salary and taxed as income in the pay period it is received. If the combined amount pushes you into a higher tax band, the portion above the band boundary is taxed at the higher rate. This is why a bonus can sometimes feel heavily taxed.
Is a bonus taxed at 40%?
Only the portion of the bonus that falls above the Higher Rate threshold (£50,270 annual / £4,189 monthly) is taxed at 40%. If your total pay including the bonus stays below that threshold, you pay 20% Basic Rate on the bonus. This calculator shows exactly which rates apply to your situation.
Does National Insurance apply to bonuses?
Yes. Bonuses are fully subject to Class 1 National Insurance at 8% (up to the Upper Earnings Limit) and 2% above. Your employer also pays 13.8% employer NI on the bonus — but this does not come out of your take-home.
Can salary sacrifice reduce the tax on my bonus?
Yes! If your employer allows it, you can ask to have some or all of your bonus paid into your pension via salary sacrifice. This removes the bonus from both your taxable income and your NI-able pay, potentially saving you 28–42% (income tax + NI combined) depending on your tax band.
Why might my actual bonus net pay differ from the calculator?
Common reasons: your payroll uses a non-cumulative Week 1/Month 1 basis; you have additional deductions like a student loan or court order; or your employer uses a different NI category. Enter your actual base salary + bonus together for the most accurate comparison.