Bonus Tax Calculator UK
Find out exactly how much of your work bonus you’ll take home in 2025/26. Calculate Income Tax and National Insurance deductions on any bonus amount instantly.
Your Bonus & Income Details
Enter your annual salary and bonus to calculate your take-home pay
Your gross annual salary (before any tax or NI deductions).
The gross bonus you expect to receive.
Select the tax year your bonus falls within.
Scotland has different Income Tax bands and rates. Note: savings and dividend income are taxed at UK rates everywhere.
Personal pension contributions that qualify for tax relief (reduces your taxable income).
Student loan repayments are 9% of income above the threshold.
Bonus Tax Breakdown
See exactly how your bonus is taxed
Enter your salary and bonus details above, then click Calculate Take-Home Bonus to see your full tax breakdown.
UK Tax Bands & Rates 2025/26
Understanding the UK tax bands helps you see exactly which rate your bonus will be taxed at. Only the portion of income within each band is taxed at that rate.
| Tax Band | Taxable Income | Income Tax Rate | NI Rate (Employee) |
|---|---|---|---|
| Personal Allowance | Up to £12,570 | 0% | 0% |
| Basic Rate | £12,571 to £50,270 | 20% | 8% |
| Higher Rate | £50,271 to £125,140 | 40% | 2% |
| Additional Rate | Over £125,140 | 45% | 2% |
Bonus Tax FAQ
Everything you need to know about how bonuses are taxed in the UK, including PAYE calculations, National Insurance, and how to reduce your tax bill.
In the UK, a cash bonus is treated as supplementary pay and is subject to Income Tax and National Insurance just like your regular salary. HMRC uses one of two methods: either your employer adds the bonus to your cumulative pay and recalculates your total tax (the 1256L method), or they apply a notional week/month and tax the bonus separately (the BR or OT code method). In both cases, the bonus is taxed at your marginal rate — meaning it is added on top of your annual salary and taxed at whichever band it falls into (20%, 40%, or 45%).
Yes, it’s possible. If your annual salary plus bonus crosses a tax threshold, the portion of the bonus above that threshold will be taxed at the higher rate. For 2025/26, the basic rate threshold is £50,270 and the higher rate threshold is £125,140. Only the amount above the threshold is taxed at the higher rate — your existing salary is not re-taxed. For example, if you earn £48,000 and receive a £5,000 bonus, only £2,270 of the bonus is taxed at 40%; the remaining £2,730 is taxed at 20%.
Yes. National Insurance Contributions (NICs) are due on bonuses just like regular earnings. For 2025/26, employees pay 8% NICs on earnings between £12,570 and £50,270 per year, and 2% on earnings above £50,270. Your employer will deduct NICs from your bonus payment at the same time as Income Tax.
When your employer processes a bonus separately from your regular payroll, they may use a notional period to calculate the tax. The tax code OT means all income is taxed at the basic rate (20%) with no personal allowance applied. The code BR means all income is taxed at the basic rate (20%). The code D0 means all income is taxed at the higher rate (40%), and D1 means the additional rate (45%). These are temporary codes used only for that specific bonus payment and do not affect your overall annual tax liability.
There are several legitimate ways to reduce the tax impact of a bonus. You can sacrifice some or all of your bonus into a pension scheme through salary sacrifice, which reduces both Income Tax and National Insurance. You can also use a Share Incentive Plan (SIP) to invest pre-tax bonus into company shares. Additionally, making pension contributions from your net bonus can reclaim tax through self-assessment if you’re a higher-rate taxpayer.
No, a bonus is not taxed at a special or higher rate. It is taxed exactly the same as your salary — through PAYE at your marginal Income Tax rate and with National Insurance at the standard employee rates. The only difference is the timing and method of calculation on your payslip. Some people mistakenly believe bonuses are taxed at a flat 40% or 45%, but this is only true if the bonus pushes your total annual income into those bands.