Bonus Tax Calculator
See how much of a bonus actually reaches your bank once Income Tax, National Insurance, student loan and pension have been taken, and what your payslip will look like in the month it is paid.
Your bonus
National Insurance is worked out on the bonus month on its own. Pay above £4,189 in a month is charged at 2% instead of 8%, so you pay £104 less NI than if the same money were spread across the year.
How a bonus is taxed
There is no separate tax on bonuses. Your bonus is added to your pay in the month it is paid, and taxed like the rest of your earnings. Three things come off it:
- Income Tax at your highest rate. Payroll works this out across the whole tax year, so you pay the same as if the bonus had been spread over twelve months.
- National Insurance, which works differently. It is worked out on each payday on its own. You pay 8% on monthly pay between £1,048 and £4,189, and only 2% above that.
- Student loan, also worked out on the payday alone, at 9% above your plan’s monthly threshold.
Worked example: £3,000 bonus on a £35,000 salary
Your normal monthly pay is £2,916.67. The bonus is all taxed at 20%, which is £600.00. In the bonus month your pay is £5,916.67, so National Insurance is 8% up to £4,189 and 2% on the rest. The extra NI is £136.34, rather than the £240 you might expect. You keep £2,263.66, or 75% of the bonus. With a Plan 2 student loan you would keep £1,993.66.
Bigger bonuses and the 40% band
A higher-rate taxpayer pays 40% Income Tax on a bonus. On £10,000 with a £60,000 salary that is £4,000 in tax and £200 in NI, leaving £5,800. If a bonus takes you over £100,000, you start losing your personal allowance. A £10,000 bonus on £95,000 leaves you just £4,800, because half of it is taxed at an effective 60%. Read our guide to the 60% tax trap for ways round it.
Putting your bonus into your pension
Many employers let you swap some or all of a bonus for a pension contribution through salary sacrifice. None of it is taxed, and some employers add the National Insurance they save too. It is one of the best value things you can do with a bonus if you do not need the cash now.
The calculator assumes you are paid monthly with a cumulative tax code and the bonus is paid in one month. For your normal pay, use the take-home pay calculator.
Sources
Figures are checked against these official sources. Last reviewed 7 November 2026.
Common questions
How much tax will I pay on a bonus?
A bonus is taxed at your highest rate of Income Tax, so 20%, 40% or 45% in England, Wales and Northern Ireland. National Insurance is usually 8%, falling to 2% on any pay above £4,189 in the month it is paid. On a £3,000 bonus with a £35,000 salary you keep about £2,264.
Why was so much tax taken from my bonus?
Your bonus month payslip often looks expensive because the bonus sits on top of your normal pay and is taxed at your highest rate. Payroll uses your tax code across the whole year, so as long as your code is cumulative (not marked W1 or M1), the tax should be right for the year.
Is a bonus taxed at a higher rate than salary?
No. There is no special bonus tax. It is added to your pay and taxed like any other earnings. It can feel higher because all of it is taxed at your top rate.
Can I avoid tax on my bonus?
You can ask your employer whether you can put some or all of it into your pension through salary sacrifice. That money then goes into your pension with no Income Tax or National Insurance taken off.
Does a bonus affect my student loan?
Yes. Student loan repayments are worked out on each payday on its own, so you repay 9% of everything above your plan's monthly threshold in the bonus month. On a £3,000 bonus with Plan 2 that is about £270.