Find out exactly how much of your bonus you will keep after tax and NI
In the UK, a bonus is treated as earnings and taxed at your marginal rate — the highest rate you pay. If your salary takes you to the basic rate band (20%) and your bonus pushes you into the higher rate (40%), part of your bonus will be taxed at 40%. National Insurance is also deducted at 8% (up to £50,270) and 2% above.
This is why a bonus often feels disappointing — a £5,000 bonus for a higher-rate taxpayer may only result in £2,800 in take-home pay.
Yes — one of the most effective ways is to ask your employer to pay some or all of your bonus directly into your workplace pension. This is called a salary sacrifice bonus and avoids both income tax and National Insurance on the amount sacrificed. For a higher-rate taxpayer, this can result in an immediate 42% saving.
It depends on your salary. If your salary is £35,000 and you receive a £5,000 bonus, your total income is £40,000 — still within the basic rate band. Your bonus will be taxed at 20% income tax plus 8% NI — so you keep approximately £3,600. If your salary is higher and the bonus pushes you above £50,270, part will be taxed at 40%.
In most cases yes — employers deduct tax via PAYE in the same pay period the bonus is paid. Some employers use the “cumulative” method which accounts for your full year earnings; others use the “non-cumulative” method which may over or under-deduct. You can use HMRC’s self assessment to reconcile at year end.
Yes — via salary sacrifice, your employer pays the bonus directly into your pension before tax. You save income tax and NI on the full amount. Check with your employer if they offer this option — not all do.
An employee earns £35,000 and receives a £5,000 bonus. Their total income is £40,000 — still within the basic rate band:
| Salary | £35,000 |
| Bonus | £5,000 |
| Total income | £40,000 |
| Tax on salary alone (20%) | £4,486 |
| Tax on salary + bonus (20%) | £5,486 |
| Income tax on bonus | £1,000 |
| NI on bonus (8%) | £400 |
| Total deducted from bonus | £1,400 |
| Bonus take-home | £3,600 (72%) |
Bonuses are taxed at your marginal rate — the highest rate that applies to your income:
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Results are estimates based on 2026/27 HMRC rates and are intended as a guide only. They do not constitute financial or tax advice. Always verify with HMRC or a qualified accountant for your specific circumstances.