How Much of My Bonus Will I Keep?
Quick Answer
If your salary plus bonus stays within the basic rate band (up to £50,270 total), you'll typically keep around 72% of your bonus after Income Tax and National Insurance. If it pushes you into the higher rate band, the portion above £50,270 is taxed more heavily — you'll keep closer to 58% of that portion.
How Bonuses Are Actually Taxed
A bonus isn't taxed at a special rate. It's simply added to your pay for that period and taxed using your normal tax code and the usual Income Tax and National Insurance bands — 20% Income Tax and 8% NI within the basic rate band, rising to 40% Income Tax and 2% NI above £50,270.
Because payroll calculates tax as if you earned that amount every pay period, a large bonus can look like it's taxed very heavily on your payslip — sometimes at close to 50% for that month. This is usually a timing effect: any overpaid tax is corrected automatically over the rest of the tax year, or refunded if not.
Approximate Keep-Rate Table
| Situation | Approx. % Kept |
|---|---|
| Bonus entirely within basic rate band | ~72% |
| Bonus portion above £50,270 (higher rate) | ~58% |
| Bonus portion above £125,140 (additional rate) | ~53% |
| Bonus sacrificed into pension | 100% (into your pension, tax-free at this stage) |
Worked Example
You earn £35,000 a year and receive a £5,000 bonus in one month. Your total annual income becomes £40,000 — still within the basic rate band. The bonus is taxed at 20% Income Tax (£1,000) and 8% NI (£400), leaving you with £3,600 of the £5,000 bonus — 72% kept.
If instead your salary was £48,000 and the £5,000 bonus pushed part of your income above £50,270, the portion above that threshold is taxed at 40% Income Tax plus 2% NI instead — reducing what you keep from that portion to around 58%.
Common Misunderstandings
- "My bonus is taxed at 50%" — usually a one-month payroll timing effect, not your real annual tax rate on the bonus.
- Bonuses don't have their own tax rate — they're taxed exactly like extra salary in that pay period.
- Pension sacrifice is often the most tax-efficient option if you don't need the cash immediately.
Frequently Asked Questions
How much of my bonus will I keep?
Is a bonus taxed differently to salary?
Why does my bonus seem to be taxed so heavily?
Do I pay National Insurance on a bonus?
Can I reduce the tax on my bonus?
Sources & Methodology
How much of your bonus you keep at each income level
These figures use the 2026/27 rules: Income Tax 20% / 40% / 45%, employee National Insurance 8% up to £50,270 and 2% above, and the Personal Allowance taper between £100,000 and £125,140. They show what you keep from the bonus itself, not your whole salary.
| Where the bonus lands | Tax + NI on the bonus | You keep |
|---|---|---|
| Basic rate (20% tax + 8% NI) | 28% | 72% |
| Basic rate with a student loan repayment (9%) | 37% | 63% |
| Higher rate (40% tax + 2% NI) | 42% | 58% |
| Between £100,000 and £125,140 (allowance taper) | 62% | 38% |
| Above £125,140 (45% tax + 2% NI) | 47% | 53% |
The student loan row applies only if your pay is already above your plan's repayment threshold, because repayments are 9% of the pay above it (6% for a postgraduate loan).
A bonus that crosses the higher rate threshold
Suppose you earn £48,000 and receive a £5,000 bonus, so your total pay for the year is £53,000. Only the first £2,270 of the bonus fits under £50,270; the other £2,730 is above it.
- £2,270 at 20% tax and 8% NI: £454.00 tax + £181.60 NI
- £2,730 at 40% tax and 2% NI: £1,092.00 tax + £54.60 NI
- Total deducted: £1,782.20, so you keep £3,217.80 (about 64%)
The 62% zone between £100,000 and £125,140
If your salary is £110,000 and you get a £5,000 bonus, every extra pound reduces your Personal Allowance by 50p. That makes the effective Income Tax rate 60%, plus 2% NI. You keep about £1,900 of the £5,000. Paying part or all of the bonus into your pension can pull your income back under £100,000 and restore the allowance.
Work out your own figure
Use our bonus tax calculator to enter your salary and bonus and see the exact tax, National Insurance and take-home amount, or try the pension tax relief calculator to see what a pension contribution from the bonus would save. For your whole salary, use the take-home pay calculator.
Why does my payslip show a much higher tax rate?
If your bonus is paid in one month, payroll treats that month as if you earned the higher amount all year. That can push the month's tax well above your real annual rate. Your annual tax is worked out on your total pay for the year, and any overpayment is corrected through your later pay packets or refunded after the tax year ends.
Rates sources: GOV.UK Income Tax rates and GOV.UK National Insurance rates.