Bonus Tax Calculator

See how much of your bonus you keep after Income Tax, National Insurance, pension and student loan — and how taking it as cash compares with sacrificing it into a pension, on 2026/27 rates.

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You keep about £6,828 of a £10,000 bonus as cash, or the full £10,000 could go into your pension.

You keep £6,828 of your £10,000 bonus as cash — about 68.28%, an effective deduction of 31.72%. Or you could sacrifice the whole £10,000 into your pension, giving up just £6,828 of take-home.

Take it as cash

68%you keep
  • You keep£6,82868%
  • Income tax£2,94629%
  • National Insurance£2262%
Gross bonus£10,000
Income Tax (annual effect)−£2,946
National Insurance (bonus pay period)−£226
You keep£6,828
Starting tax + NI 28%
Highest tax + NI42%
Effective deduction31.72%

Income Tax is the annual effect (cumulative PAYE). National Insurance and student loan are estimated for the single pay period the bonus lands in, since they're worked out per period and don't reconcile over the year. On an annual (director) basis the NI would be about £516.

Sacrifice it to your pension

Added to your pension£10,000
Immediate take-home cost£6,828
Tax & NI saved£3,172

Sacrificing the bonus puts the full £10,000 into your pension while your take-home falls by only £6,828 — the rest is tax and NI you never pay.

Bonus sacrifice must be offered by your employer and agreed before you become unconditionally entitled to the cash. It counts towards your pension annual allowance along with all your other contributions — the standard allowance is £60,000, but yours may be lower (tapered allowance or the money-purchase annual allowance).

What pushes the deduction up

  • £4,730 of the bonus is taxed above the basic rate (40% or more in the rest of the UK).

Frequently asked questions

How much tax will I pay on my bonus?

A bonus is taxed like the rest of your pay: it stacks on top of your salary, so it’s taxed at your highest rate (20%, 40% or 45% in the rest of the UK), plus National Insurance and any student loan. If the bonus pushes you into a higher band, only the part above the threshold is taxed at the higher rate. This calculator shows the exact split.

Why did my bonus seem to be taxed so heavily on the payslip?

PAYE is worked out per pay period, so in the month a bonus is paid your earnings look unusually high. Income Tax is cumulative, so any over-deduction usually corrects over the following months via your tax code. National Insurance and student loan are calculated separately for each pay period and do not reconcile in the same way — a one-off bonus can take a large student-loan slice that month. This calculator shows Income Tax as the annual effect and NI and student loan for the bonus pay period.

Can I avoid tax on my bonus by putting it into my pension?

If your employer offers bonus sacrifice, you can give up the bonus and have the gross amount paid into your pension instead. You then pay no Income Tax or National Insurance on it, so the full amount goes into your pension while your take-home only falls by what you would have kept as cash. It must be agreed before you become unconditionally entitled to the cash, and it counts towards your £60,000 pension annual allowance (which may be lower for you).

Does a bonus affect Child Benefit or my Personal Allowance?

It can. A bonus raises your adjusted net income, which can increase the High Income Child Benefit Charge (between £60,000 and £80,000) and withdraw Personal Allowance (between £100,000 and £125,140, an effective 60% rate). Sacrificing the bonus into a pension avoids both. The calculator flags these where they apply.

Is a bonus taxed differently from normal pay?

No — there is no special “bonus tax rate”. A bonus is just extra earnings taxed at your marginal rate. It can feel higher because it sits on top of your salary and may cross a tax band, trigger the £100k taper or the Child Benefit charge, or take a 9% student loan slice.

Related calculators & guides

Sources — official UK figures

Last reviewed June 2026 against official rates · How we calculate →

Income Tax here is the annual effect on 2026/27 rates (or the year you choose); National Insurance and student loan are estimated for the pay period the bonus is paid in. Your actual payslip can still differ. Income Tax may correct over later pay periods where a cumulative tax code is used; National Insurance and student loan are worked out separately for each pay period and do not normally reconcile in the same way (a low annual income can mean a student-loan refund after year end). It assumes a single PAYE job with a standard tax code and the bonus paid in one period. Pension sacrifice must be offered by your employer and agreed before you become unconditionally entitled to the cash. Not financial advice.