Bonus Calculator UK 2026-27
This bonus calculator shows exactly what you take home from a bonus after income tax and National Insurance, because a bonus is taxed at your marginal rate. Enter your salary and bonus in the bonus calculator below to see the tax, the NI and the amount you actually keep.
Why a bonus feels so heavily taxed
A bonus stacks on top of your salary, so it’s taxed from your highest point up. If your salary is already in the 40% band, the bonus is taxed at 40% plus 2% National Insurance — so you keep roughly 58p in the pound. Paying it into a pension is the usual way to avoid that.
How a UK bonus is taxed in 2026-27: marginal rate and National Insurance
A bonus in the UK is not taxed under any special scheme. It is added to your annual salary and taxed at your marginal rate— the rate that applies to the top slice of your income — plus National Insurance. That single fact explains almost everything people find surprising about a bonus, and it is what this bonus calculator is built around: the take-home you keep depends far more on the salary the bonus lands on than on the size of the bonus itself.
For 2026-27 the personal allowance is £12,570, income up to £50,270 is taxed at the 20% basic rate, income from £50,270 to £125,140 at the 40% higher rate, and anything above £125,140 at the 45% additional rate. National Insurance is charged at 8% between £12,570 and £50,270, then just 2% above £50,270. A bonus is stacked on top of your salary, so it is taxed in whichever of these bands your salary has already reached — and often it straddles two.
The practical upshot: a basic-rate earner keeps about 72p of every bonus pound (20% tax + 8% NI), a higher-rate earner keeps about 58p (40% tax + 2% NI), and someone caught in the £100,000–£125,140allowance trap keeps as little as 38p. None of these are “bonus tax” rates — they are simply your ordinary marginal rates, applied to money that has no tax-free allowance left to shelter it.
The official rates behind every figure here are published by GOV.UK: see the GOV.UK income tax rates and the GOV.UK National Insurance rates. To see the same maths applied to your regular pay rather than a one-off, use the salary calculator, and to fold your bonus take-home into your wider budget, start from the household bills calculator.
Why a bonus “feels” so heavily taxed
When you look at your monthly payslip, the tax on your salary is diluted by your personal allowance and your 20% band, which sit at the bottom of your income. A bonus never touches those low bands — it lands entirely at the top, so every pound is taxed at your highest rate. A worker paying an average tax rate of 20% on their salary can easily pay a marginal rate of 42% on their bonus. The bonus is not treated differently; it is just made of your most expensive pounds.
A second reason is PAYE itself. Payroll software calculates tax on the assumption that each month repeats. In the month a large bonus is paid, the system briefly behaves as though you will earn that inflated amount every month, so it can over-withhold tax — sometimes dramatically. Over the following months PAYE reconciles and the over-deduction washes out, but the take-home figure in the bonus month can look far worse than the true annual result. Our bonus calculator shows the correct annual figure rather than that one alarming month.
Finally, a bonus can trigger costs that are not tax at all: extra student loan repayments in that period, the High Income Child Benefit Charge above £60,000, or the loss of tax-free childcare above £100,000. Add these to the marginal rate and the true cost of a bonus can climb well beyond the headline percentage — which is exactly why understanding your marginal rate before you receive it is worth the few minutes it takes.
£5,000 bonus take-home by salary band
The table below shows what happens to an identical £5,000 bonus at four different salaries in 2026-27 (rest of UK). The bonus never changes — only the salary it stacks on top of — yet the take-home ranges from £3,600 down to just £1,900. It is the clearest illustration of why marginal rate, not bonus size, decides what you keep.
| Salary | Bonus taxed in | Income tax | National Insurance | You keep | Effective rate |
|---|---|---|---|---|---|
| £25,000 | Basic rate | £1,000 | £400 | £3,600 | 28% |
| £45,000 | Basic rate (just under higher threshold) | £1,000 | £400 | £3,600 | 28% |
| £60,000 | Higher rate | £2,000 | £100 | £2,900 | 42% |
| £110,000 | 60% trap (allowance taper) | £3,000 | £100 | £1,900 | 62% |
Notice that £25,000 and £45,000 give the identical result: both sit inside the 20% basic-rate band, and a £5,000 bonus on a £45,000 salary reaches £50,000 — still just under the £50,270 higher-rate threshold. Push the salary a little higher and part of the bonus tips into the 40% band; on £60,000 the whole bonus is taxed at 40% plus 2% NI. The £110,000row is the punchline — that is the 60% trap, explained next.
Source: GOV.UK income tax rates and GOV.UK National Insurance rates, 2026-27
Marginal rate on your bonus, band by band
A bonus is taxed at the marginal rate of the band it falls into, so the combined income tax and National Insurance rate below is exactly what each extra pound of bonus costs. This is the single most useful table for planning a bonus: find the band your salary already reaches, and that combined rate is what leaves you on the way in.
| Band | Income range (2026-27) | Income tax | National Insurance | Combined marginal rate |
|---|---|---|---|---|
| Personal allowance | £0 – £12,570 | 0% | 0% | 0% |
| Basic rate | £12,570 – £50,270 | 20% | 8% | 28% |
| Higher rate | £50,270 – £100,000 | 40% | 2% | 42% |
| 60% trap (allowance withdrawal) | £100,000 – £125,140 | 60% | 2% | 62% |
| Additional rate | Over £125,140 | 45% | 2% | 47% |
The 60% income tax figure in the fourth row is not a headline rate anywhere in the legislation — it is the effect of the personal allowance being withdrawn, covered below. In Scotland the bands and rates differ (a 42% higher rate begins at £43,663), so a bonus there is often taxed more heavily; the Scottish tax calculator shows the difference.
Source: GOV.UK income tax rates, 2026-27
The 60% tax trap between £100,000 and £125,140
Once your total income (salary plus bonus) passes £100,000, your £12,570 personal allowance is withdrawn at a rate of £1 for every £2 you earn above the threshold. By £125,140 the allowance is gone entirely. Because you pay 40% on the bonus itself and 40% on the slice of allowance you have just lost, the effective income tax rate across this band is 60% — 62% once you add 2% National Insurance.
Here is the mechanism in numbers. A £5,000 bonus that takes your income from £110,000 to £115,000 removes £2,500 of allowance (half of the £5,000). That £2,500 is now taxed at 40% (£1,000), on top of the £2,000 of 40% tax on the bonus itself — £3,000 of income tax on a £5,000 bonus, plus £100 of NI. You keep just £1,900. This is why the £110,000 row in the take-home table looks so brutal, and why the £100,000–£125,140 band is the worst place in the UK system to receive a bonus in cash.
The rule is set out in full at GOV.UK — income over £100,000. The good news is that this same band is where salary sacrifice into a pension delivers its biggest return, because reducing your taxable income back below £100,000 restores the allowance you were losing.
Cutting the bill: pension salary sacrifice
The most effective way to reduce the tax on a bonus is to not receive it as cash at all. Under a bonus (or salary) sacrifice arrangement, you agree with your employer to give up the bonus before it is paid, and the money goes straight into your pension. Because the sacrifice happens before tax and National Insurance are calculated, you avoid both entirely — you save at your full marginal rate rather than getting relief afterwards.
For a higher-rate taxpayer that is a 42% saving (40% tax + 2% NI); inside the 60% trap it is a 62% saving. Sacrifice a £5,000 bonus and the full £5,000 lands in your pension — money that, taken as cash on a £110,000 salary, would have left you with only £1,900. Many employers also pass on some or all of the 15% employer National Insurance they save, adding still more to your pot. Sacrificing enough to bring taxable income back under £100,000 also restores the personal allowance the taper was removing.
The trade-off is access: pension money is locked away until at least age 55 (rising to 57 from 2028), and very large contributions can hit the annual allowance, so a bonus sacrifice suits long-term savers rather than anyone who needs the cash now. The mechanics of the tax relief are explained at GOV.UK — pension tax relief. If you are weighing the cash instead against a house purchase, the mortgage calculator shows what the after-tax amount does for your borrowing.
Source: GOV.UK — Tax on your private pension: pension tax relief
Worked example: a £10,000 bonus on a £95,000 salary
Take a common real-world case — a £95,000 salary and a £10,000 bonus — and follow the money through. The total is £105,000, which pushes £5,000 of the bonus over the £100,000 threshold and into the personal-allowance taper.
Step 1 — the slice below £100,000
The first £5,000 of the bonus takes income from £95,000 to £100,000. It is taxed at the 40% higher rate (£2,000) plus 2% NI (£100), because the salary already sits above the upper NI limit. You keep £2,900 of this half.
Step 2 — the slice above £100,000
The second £5,000 takes income from £100,000 to £105,000. It is taxed at 40% (£2,000) and also withdraws £2,500 of personal allowance, which is itself taxed at 40% (£1,000). Add 2% NI (£100) and this half costs £3,100 — a 62% marginal rate — leaving you just £1,900.
The result
Total tax and NI on the £10,000 bonus is £5,200, so you keep £4,800 — an effective rate of 52% blended across the two slices. Sacrifice the whole bonus into a pension instead and all £10,000 lands in your pot with no tax or NI, and your taxable income drops back to £95,000, clear of the taper entirely. That single decision is worth more than £5,000 against the cash alternative. Once the take-home is settled, drop it into the council tax calculator and the gas and electric bill calculator to see how much of the bonus your fixed bills would absorb.
Source: worked from GOV.UK income tax rates and GOV.UK income over £100,000, 2026-27