Bonus Tax UK 2026/27
Bonuses are taxed as normal income - there's no special "bonus tax." However, they often push you into higher tax bands, which can be surprising.
How Bonus Tax Works
Your bonus is added to your salary and taxed at your marginal rate:
| Your Tax Band | Tax on Bonus |
|---|---|
| Basic rate | 20% + 8% NI = 28% |
| Higher rate | 40% + 2% NI = 42% |
| Additional rate | 45% + 2% NI = 47% |
Why Bonuses Feel Heavily Taxed
When paid, your employer calculates tax as if you receive that bonus every month. This can result in:
- Higher tax deduction than expected
- Correction in subsequent months
- Or adjustment via Self Assessment
Bonus Tax Examples
Example 1: £40,000 salary + £5,000 bonus
| Component | Amount | Tax Rate | Tax/NI |
|---|---|---|---|
| Salary in basic rate | £40,000 | 20%/8% | - |
| Bonus (within basic) | £5,000 | 20%/8% | £1,400 |
| Bonus take-home | £3,600 |
Example 2: £48,000 salary + £5,000 bonus
| Component | Amount | Tax Rate | Tax/NI |
|---|---|---|---|
| Salary in basic rate | £48,000 | 20%/8% | - |
| Bonus part 1 (basic) | £2,270 | 20%/8% | £636 |
| Bonus part 2 (higher) | £2,730 | 40%/2% | £1,147 |
| Bonus take-home | £3,217 |
Example 3: £100,000 salary + £20,000 bonus
At £100k+, you face the 60% trap:
| Component | Effective Rate | Tax/NI |
|---|---|---|
| £20,000 bonus | ~60% | ~£12,000 |
| Bonus take-home | ~£8,000 |
Tax-Efficient Bonus Strategies
1. Pension Sacrifice
Sacrifice your bonus into pension:
- Saves Income Tax at your marginal rate
- Saves National Insurance
- Grows tax-free
2. Timing
If your income varies yearly, consider:
- Deferring bonus to lower income year
- Requesting payment in two tax years
3. Childcare Vouchers
If grandfathered, sacrifice into childcare (legacy scheme only).
Bonus Tax Calculator
Quick formula:
Net Bonus = Bonus × (1 - Marginal Tax Rate - NI Rate)
| Tax Band | Formula | Example £5,000 |
|---|---|---|
| Basic | £5,000 × 0.72 | £3,600 |
| Higher | £5,000 × 0.58 | £2,900 |
| Additional | £5,000 × 0.53 | £2,650 |
Common Questions
Will I get some tax back?
If your employer over-deducted, yes. Either:
- Automatic correction in following months
- Via Self Assessment
- Contact HMRC
Is bonus taxed differently to salary?
No. It's all income, taxed at your marginal rate.
Can I avoid bonus tax?
You can't avoid it, but you can manage it via pension contributions.
Related Calculators
- Bonus Calculator - Calculate bonus take-home
- Take Home Pay Calculator - Full salary breakdown
- Pension Calculator - Sacrifice strategy