⚡ How Much Tax Will You Pay on a Bonus? (Quick Benchmark)
Marginal PAYEIn the UK, bonuses do not receive a special lower tax rate. They are stacked on top of your existing salary in the pay period paid. The marginal deduction rate depends on your total annual earnings:
| Salary Bracket | Income Tax | National Insurance | Total Marginal Tax | Take-Home on £10,000 Bonus |
|---|---|---|---|---|
| Basic Rate (£12,571–£50,270) | 20% | 8% | 28% | £7,200 kept |
| Higher Rate (£50,271–£100,000) | 40% | 2% | 42% | £5,800 kept |
| £100k Trap (£100,001–£125,140) | 60% (40% + 20% Taper) | 2% | 62% | £3,800 kept (62% lost!) |
| Additional Rate (£125,141+) | 45% | 2% | 47% | £5,300 kept |
Interactive Bonus Tax & Sacrifice Calculator
⚠️ Your bonus pushes you into the £100k Tax Trap!
Your base salary is £95,000 and your bonus is £15,000, bringing total earnings to £110,000. The £10,000 earned above £100k loses £5,000 in Personal Allowance, triggering a 62% marginal tax rate. With your student loan, you lose 71% of that slice!
Worked Examples: How Bonuses Are Taxed Across Brackets
Realistic examples demonstrating how student loans, Higher Rate PAYE, and the £100k trap consume bonus payouts.
£10,000 Bonus on £60k Salary
Base: £60,000 | Bonus: £10,000
Even without the £100k trap, higher-rate earners with a student loan lose over 51% of their bonus.
£15,000 Bonus on £95k Salary
Total Earnings: £110,000
The worker loses £9,650 to tax and debt repayments, keeping barely over a third of their hard-earned bonus.
Sacrificing £10,000 of the Bonus
Diverting £10k into Pension:
Trading £2,900 of cash in pocket for £10,000 in your pension is the single most lucrative tax play in the UK.
Frequently Asked Questions About UK Bonus Tax
Bonuses are added to your normal pay and taxed as employment income via PAYE. They are subject to Income Tax (20%, 40%, 60%, or 45%), National Insurance (8% or 2%), and student loan repayments (6% or 9%). There is no special lower tax rate for bonuses.
If a bonus takes your total earnings above £100,000, the portion over £100k is taxed at an effective 60% Income Tax rate due to Personal Allowance loss. With 2% NI and 9% student loan, your marginal deduction rate can reach 71%.
Yes. A bonus sacrifice agreement allows your employer to pay your bonus directly into your pension. This saves Income Tax, National Insurance, and student loans, giving you the full 100% gross value of the bonus inside your pension pot.
HMRC's PAYE software calculates tax by multiplying your single month's pay by 12. A large bonus makes it look like your annual salary has skyrocketed, often triggering higher tax brackets. Any excess tax paid is automatically rebated over subsequent months.