Free tool · UK 2026/27 tax year
UK Bonus Tax Calculator
See exactly what lands in your account after income tax, NI and pension. Flags the £100k–£125k 60% effective-rate trap most calculators miss. Built by a 12-year UK recruiter.
How UK bonus tax really works in 2026/27
Your bonus is treated as ordinary employment income — same income tax, same National Insurance, same Personal Allowance taper. Nothing about a bonus is taxed at a special "bonus rate", despite the persistent myth. What's different is timing: your employer typically pays the bonus in a single payslip, which can briefly skew the PAYE deduction higher than your annual liability. The HMRC system corrects this by year-end either through the next payslip or via the P800 reconciliation.
For 2026/27, the bands are: 0% on the first £12,570 (Personal Allowance), 20% basic rate to £50,270, 40% higher rate to £125,140, then 45% additional rate above. National Insurance for employees is 8% between £12,570 and £50,270, then 2% above. Add them and you get marginal rates of 0%, 28%, 42%, 60%, 47% across the bands. The 60% only applies in the £100,000–£125,140 zone, because you lose £1 of Personal Allowance for every £2 earned above £100k — that adds an extra effective 20% on top of the 40% higher rate.
The £100k 60% trap
I've watched candidates over twelve years accept bonuses in the worst possible band. Someone earning £92k who gets a £15k bonus crosses £100k, loses £7,500 of Personal Allowance over that next £15k, and ends up paying 60% effective on most of the bonus. Three thousand pounds lands in their account from a fifteen thousand pound bonus, and they didn't see it coming. The fix isn't avoiding the bonus — it's sacrificing enough of it into pension to stay below £100k.
Pension salary sacrifice is the most common defensive move. The contribution comes off your gross pay before tax, so a £15k bonus sacrificed in full bypasses the 60% zone entirely. You don't lose the money — it sits in your pension. For someone planning to retire in 10–25 years, this is usually the highest-return move available, because you're effectively getting a 60% government top-up on the contribution. The downside is liquidity (locked until 57+ from 2028 onward), and the annual allowance cap of £60,000 (less if you've triggered MPAA).
What the calculator does and doesn't model
The calculator handles standard PAYE income tax and Class 1 employee NI for England/Wales/NI on the 2026/27 bands. It applies the Personal Allowance taper between £100k and £125,140 correctly. It models pension contribution as pre-tax salary sacrifice (which is what most modern UK schemes use). It does not model: Scottish income tax bands (different structure), student loan deductions (Plan 1, 2, 4, 5 each take their own slice), Marriage Allowance transfers, blind person's allowance, or savings/dividend income that affects your overall tax position. For a complete picture including all of these, pair this with the UK take-home pay calculator, which models full PAYE on annual salary including student loans.
Three bonus negotiation moves I see candidates miss
One. Time the bonus payment if you can. Bonuses paid in March vs April fall in different tax years. If you're due a £40k bonus and you've used your full Personal Allowance this year but expect lower income next year (parental leave, sabbatical, redundancy), pushing the bonus into the next tax year can save thousands. Most employers won't agree, but some will — particularly if you frame it as a corporate cash-flow benefit.
Two. Ask whether the employer will increase the gross bonus by the employer NI saving if you sacrifice into pension. The employer saves 13.8% NI on every pound that goes to pension instead of cash. Some employers share that saving with the employee (50/50 split is common in modern schemes); most don't volunteer it. It's a question worth asking, particularly for senior roles where the absolute saving is meaningful.
Three. Convert the bonus into other forms. Health insurance, additional employer pension contribution, professional development budget, sabbatical entitlement, additional holiday — these are valuable benefits often available as tax-efficient swaps. The bonus is a starting point for the conversation, not the end point. Read the UK hiring patterns piece for how 2026 employers are increasingly using non-cash benefits to retain talent under pay freeze pressure.
Why I built this
Most UK bonus calculators online either ignore the 60% trap entirely or hide it in a footnote. I've personally watched dozens of candidates take the bonus number at face value and end up with a third of what they expected. This calculator runs in your browser, takes nothing about you, and shows you the trap explicitly when you cross into it — because the only thing worse than paying 60% tax on your bonus is paying it without realising.
Common questions
- How much tax will I actually pay on a UK bonus?
- On a normal bonus, the same income tax and National Insurance rules apply as for salary — the bonus is added on top of your annual income and taxed at whatever marginal rates apply. If your base salary is in the basic-rate band (20% income tax + 8% NI), most of your bonus will be taxed at 28% combined. If you cross into higher rate, the slice above £50,270 is taxed at 42% (40% + 2% NI). The trap is the £100,000–£125,140 band, where you also lose your Personal Allowance — that pushes the effective rate on that slice to 60%, which the calculator flags automatically.
- What is the £100,000 60% tax trap?
- Between £100,000 and £125,140 of total annual income, you lose £1 of your £12,570 Personal Allowance for every £2 you earn over £100k. By the time you hit £125,140 the Personal Allowance is fully withdrawn. Combined with 40% higher rate income tax, the effective marginal rate on every pound earned in this £25k slice is 60% (plus another 2% NI = 62%). A £20,000 bonus that pushes you from £95k to £115k can lose more than £12,000 to tax + NI — and most pre-bonus calculators don't show this. Pension salary sacrifice is the most common defensive move because the contribution comes off pre-tax and stays below the £100k cliff.
- Why does PAYE sometimes deduct more than this calculator shows?
- Your employer's payroll system divides your annual tax-free allowance across the year. When a one-off bonus lands in a single payslip, the system sometimes treats it as if you'll earn that high amount every month, then taxes the bonus month at the higher rate. This usually corrects itself by the end of the tax year — either the next payslip uses a lower rate, or you get a refund via P800 / Self Assessment. The figure this calculator shows is your annual liability, which is what you actually owe across the full year.
- Should I sacrifice some of my bonus into pension?
- Almost always yes if your bonus pushes you into higher rate territory or near the £100k cliff. Salary-sacrificed pension contributions come off gross — meaning you save 40% income tax + 2% NI (and the employer saves 13.8% NI which sometimes gets shared with you). For someone in the £100k–£125k taper zone, sacrificing the bonus into pension can keep the pre-tax salary below £100k and recover the full Personal Allowance, making the effective relief closer to 60%. Check your pension annual allowance (£60,000 default for 2026/27, less if you've already triggered the Money Purchase Annual Allowance) and whether your scheme allows salary sacrifice — most modern UK schemes do.
- Does this calculator work for Scotland?
- This calculator currently uses the rates for England, Wales and Northern Ireland. Scottish income tax bands are different (starter, basic, intermediate, higher, top with separate rates), so a Scottish taxpayer's bonus tax will not match exactly. For 2026/27 the Scottish higher rate is 42% and top rate is 48%, with a more granular band structure below £43,663. National Insurance is reserved (UK-wide, identical), so the NI portion of the calculator is correct for Scotland. We'll add a Scottish toggle in a future version.