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Bonus tax

Bonus tax

On your bonus, you keep

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£5,800

of £10,000 gross · 42.0% of every bonus £ goes to tax / NIC

2026/27 rates · Last checked · Sources visible below

Marginal hit

Effective rate

42.0%

on full bonus

On every kept £

42.0%

post-sacrifice

In your pocket

£5,800

of £10,000 gross

Where the bonus goes

42.0% effective
To you (net)

£5,800

Income tax

£4,000

Employee NIC

£200

Breakdown

Bonus (gross)

£10,000

− Income tax

− £4,000

− Employee NIC

− £200

= Net to you

£5,800

Total take-home this year

Without the bonus

£45,357

£60,000 salary

With the bonus

£51,157

+ £5,800 from bonus

Estimates for illustrative and educational purposes only. Calculations use HMRC published rates and are not regulated financial, tax, or legal advice. Verify against your own tax position before filing or making financial decisions.

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How UK bonuses are taxed in 2026/27

A bonus stacks on top of your salary, so the rate it's taxed at depends entirely on what you already earn. The killer number is not the rate on the bonus. It is the marginal rate on the next £1, which can be anywhere from 28% (basic + NIC) to 62% (60% trap).

  • Why does my bonus get taxed so much?

    A bonus stacks on top of your salary, so it's taxed at your marginal rate: the rate on the last pound you earned. For most higher-rate taxpayers that's 42% (40% income tax + 2% NIC). If the bonus pushes you past £100,000 you also lose 50p of personal allowance for every extra £1, taking the marginal rate to ~62%. None of this is the bonus being treated specially. It's just stack mechanics.

  • Why was my bonus taxed even more on my payslip?

    PAYE assumes the rate of pay in the bonus month continues all year. If you get a £10,000 bonus in October on top of a £5,000 monthly salary, that month HMRC pretends you earn £15,000/month every month, so it withholds tax at the highest applicable rate. By the next pay run it self-corrects, and at the year end you've been taxed on your real total, not the projected one. You don't lose anything; you are just owed it back through later payslips.

  • Can I redirect my bonus into pension to avoid tax?

    Yes. Many employers offer 'bonus sacrifice'. The full gross amount goes into your pension and you pay no income tax and no employee or employer NIC on the sacrificed slice. It's the most tax-efficient route by some distance. If you're hit by the 60% trap (£100k to £125k) or HICBC, sacrificing the bonus down to the threshold can save more than the bonus itself nets after tax.

  • Does a bonus affect my student loan repayment?

    Yes. Student loan is charged on income above the plan threshold at 9% (6% for postgrad). A bonus pushes more of your income above the threshold, so an extra ~9% comes off the bonus on top of income tax and NIC.

  • Will a bonus push me into the 60% tax trap?

    If your salary plus bonus is between £100,000 and £125,140, yes. Every £2 above £100,000 reduces your personal allowance by £1, creating an effective marginal rate of about 62% (60% on the income tax slice + 2% NIC). To escape, you can sacrifice the portion of the bonus that puts you over £100,000 into your pension.

Sources & last reviewed

Updated for 2026/27 · last reviewed 1 May 2026 · view changelog →

Bands, thresholds and reliefs on this page come directly from the following official sources. Tax rates are checked against these references whenever a Budget or in-year change is announced.