A bonus is taxed as normal earnings. There’s no special “bonus tax”. It just sits on top of your salary, so all of it is taxed at your marginal rate. The bonus payslip often looks alarming, but over the year you normally pay the right amount.
A worked example
On a £45,000 salary with a £5,000 bonus paid in one month (England, 2026/27):
| Payslip | Normal month | Bonus month |
|---|---|---|
| Gross pay | £3,750.00 | £8,750.00 |
| Income Tax | £540.50 | £1,540.50 |
| National Insurance | £216.16 | £342.50 |
| Take-home | £2,993.34 | £6,867.00 |
Over the year, the bonus adds £3,874 to take-home pay, about 77% of the £5,000.
Income Tax on a bonus
PAYE is cumulative. In the bonus month, payroll looks at your total pay so far this tax year, so the bonus is taxed at whatever rate your total income reaches. In the example, part of the bonus crosses the £50,270 higher-rate threshold, so that slice is taxed at 40%.
You’ll sometimes hear that a bonus is “taxed as if you earn that every month”. That was true of old payroll systems and emergency codes, but with a normal cumulative tax code it isn’t. The year-end total is correct.
National Insurance on a bonus
NI is worked out for each pay period separately. In the bonus month most of the bonus is above the monthly Upper Earnings Limit (£4,189), so it’s charged at 2% rather than 8%. That’s why a lump-sum bonus can carry less NI than the same money spread across the year.
Student loans
Student loan repayments are also per period: 9% of the whole bonus above the monthly threshold (or 6% for a Postgraduate loan). There’s no catch-up later. You don’t get a refund if your annual income turns out to be lower, unless it ends up below the annual threshold.
Higher earners: bonuses and the £100k trap
If a bonus takes you over £100,000, part of it falls in the 60% band where your Personal Allowance is withdrawn, and you may lose childcare support entirely. On a £90,000 salary, a £20,000 bonus adds only £9,600 of take-home pay. See the £100k tax trap.
Keep more: bonus sacrifice
Many employers let you sacrifice some or all of a bonus into your pension before it’s paid. You save Income Tax and NI, and your employer may pass on their 15% NI saving too. For a higher-rate taxpayer, £1,000 of bonus might become £580 of take-home, or £1,000 (sometimes £1,150) in your pension.
Check the rules: the election usually has to be made before the bonus is decided or paid. From April 2029, pension salary sacrifice above £2,000 a year will attract NI.
Model your bonus
Add your bonus under Bonus, overtime & benefits in the take-home pay calculator. It shows a normal month next to your bonus month, plus the effect on your annual take-home and any cliff edges.
Common questions
Is bonus tax 40%?
Only if your salary plus bonus goes over £50,270 (England, Wales, NI). Below that, a bonus is taxed at 20% plus NI.
Will I get some of my bonus tax back?
With a normal cumulative tax code, no. The tax is correct for the year. With an emergency code, any overpayment is corrected later.
Can I put my bonus in my pension?
Often, through bonus sacrifice. Ask before the bonus is paid. It can avoid the £100k trap and the Child Benefit charge.
How do I see my bonus month payslip?
Add the bonus in the take-home pay calculator. It shows a normal month next to the bonus month.
This guide is general information, not financial or tax advice.