Bonus Tax Calculator UK

Bonuses are taxed as part of your total earnings. They're added to your salary and taxed at your marginal rate - 20% basic, 40% higher, or 45% additional rate. National Insurance at 8% (or 2% above £50,270) also applies. Your bonus doesn't have a special 'bonus tax' - it's simply taxed as income.

Bonuses often push you into a higher tax bracket. If your salary is near £50,270, a bonus could be taxed at 40% instead of 20%. Additionally, your employer may use Month 1 basis for PAYE, temporarily overtaxing you until your annual earnings balance out.

Yes! You can salary sacrifice your bonus into a pension to avoid income tax and NI entirely. You could also use it to increase pension contributions, make charitable donations via Gift Aid, or if you're near £100k, reduce taxable income to avoid losing your Personal Allowance.

If PAYE overtaxed your bonus using Month 1 basis, it will usually balance out through the year. If you've overpaid by year-end, HMRC will refund you automatically or you can claim via Self Assessment or by contacting HMRC directly.

Yes. Bonuses are subject to Class 1 National Insurance at 8% on earnings between £12,570 and £50,270, and 2% on earnings above £50,270. Your employer also pays 15% Employer NI on your bonus.