Precision Utility
Bonus Tax
Calculator
Personal Allowance
£12,570
Tax Year
2025/26
Find out exactly how much of your bonus you take home after tax and National Insurance. Enter your annual salary and bonus amount to see the income tax and NI charged on the bonus alone — not a flat rate, but your actual marginal rate based on where the bonus sits within the HMRC tax bands. Results update instantly using 2025/26 thresholds.
Your Bonus Details
Net Bonus
£3,600
Tax on Bonus
£1,000
NI on Bonus
£400
Total Deductions
£1,400
Net Bonus %
72.0%
Income Tax on Bonus
£1,000
NI on Bonus
£400
Total Tax
£1,400
Net Bonus Amount
£3,600
How the bonus tax calculator works
Enter your annual salary and the bonus amount you expect to receive. The calculator works out income tax and National Insurance on your salary alone, then on your salary plus bonus combined. The difference is the tax attributable to your bonus.
This approach gives you the true marginal cost of your bonus — not a flat estimate but the exact amount HMRC will deduct based on which tax bands your bonus falls into. If your bonus pushes you from the basic rate into the higher rate band, you'll see part taxed at 20% and part at 40%.
Your tax code determines your Personal Allowance. The standard code 1257L gives you £12,570 tax-free. If your code is different, the calculator adjusts your allowance accordingly. If your total income exceeds £100,000, the calculator automatically tapers your Personal Allowance — reducing it by £1 for every £2 above £100,000.
Open the band breakdown to see exactly how much of your bonus falls into each tax band and how much tax is charged on each portion.
What you need to know about bonus tax in the UK
Many people believe bonuses are taxed at a special flat rate. This is a common misconception. In reality, HMRC treats a bonus as part of your normal earnings. It is stacked on top of your regular salary and taxed at whatever marginal rate applies to that slice of income.
Here are the income tax bands for 2025/26 that determine how your bonus is taxed:
- Personal Allowance (0%): £0 – £12,570 — already used by your salary in most cases
- Basic rate (20%): £12,571 – £50,270 — if your salary plus bonus stays within this range
- Higher rate (40%): £50,271 – £125,140 — the portion of your bonus that crosses this threshold
- Additional rate (45%): £125,141+ — applies to the highest earners
National Insurance on bonuses: Employees pay 8% NI on earnings between £12,570 and £50,270 and 2% on earnings above £50,270. These rates apply to your bonus in the same way as your salary.
The 60% trap: If your total income (salary plus bonus) falls between £100,000 and £125,140, you lose £1 of Personal Allowance for every £2 above £100,000. Combined with the 40% tax rate, this creates an effective marginal rate of 60% on that slice of income. A bonus that pushes you into this range can be particularly costly.
Salary sacrifice: One way to reduce the tax hit on a bonus is to sacrifice it into a workplace pension. This reduces your taxable income and saves both income tax and National Insurance. Speak to your employer about whether this is an option.
For a full breakdown of your take-home pay including tax, NI, pension and student loans, use our salary calculator. For the latest rates, see the official HMRC income tax rates page on GOV.UK.
Frequently asked questions
How is a bonus taxed in the UK?
A bonus is taxed as additional income on top of your regular salary. It is not taxed at a flat rate. Instead, it is added to your annual earnings and taxed at your marginal rate — the tax band your total income falls into after the bonus is included. This means the tax on your bonus depends entirely on how much you already earn.
What tax rate applies to my bonus?
The tax rate on your bonus depends on your total income including the bonus. If your salary plus bonus stays within the basic rate band (up to £50,270), you pay 20% tax on the bonus. If it pushes you into the higher rate band (£50,271–£125,140), the portion above the threshold is taxed at 40%. Above £125,140, the additional rate of 45% applies.
Do I pay National Insurance on a bonus?
Yes. National Insurance contributions apply to bonuses just as they do to regular earnings. You pay 8% on the portion of your total earnings (salary plus bonus) between £12,570 and £50,270, and 2% on anything above £50,270. The NI on the bonus is the difference between NI on your total income and NI on your salary alone.
Why does my bonus seem heavily taxed?
Bonuses often appear heavily taxed because they are added on top of your salary and taxed at your marginal rate. If your salary already uses up most or all of the basic rate band, the entire bonus may be taxed at 40% or even 45%. Additionally, if your total income crosses £100,000, Personal Allowance tapering can create an effective marginal rate of 60%.
Can I salary sacrifice my bonus?
Yes, in many cases you can arrange with your employer to sacrifice part or all of your bonus into a pension. This reduces your taxable income, meaning you pay less income tax and National Insurance. It is one of the most effective ways to reduce the tax impact of a bonus, especially for higher and additional rate taxpayers.
Is a bonus taxed differently from salary?
No. HMRC treats a bonus as part of your normal earnings. It is subject to the same income tax bands and National Insurance rates as your salary. However, because a bonus is paid on top of your regular pay, it is typically taxed at your highest marginal rate, which is why it can feel like bonuses are taxed more heavily.
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