How much tax do I pay on a UK bonus?

From the recruitment desk: I get this question every January when bonuses land. The short answer is that there is no special bonus tax. Your bonus is treated as ordinary employment income — same income tax, same National Insurance, same Personal Allowance taper. What feels 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.

The 2026/27 bands. 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% 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 By the time you hit £125,140 the Personal Allowance is fully withdrawn.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%). I've watched candidates accept bonuses without realising this and end up with a third of what they expected.

The defensive move. Pension salary sacrifice is the most common play. 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.

Why payroll sometimes deducts more than this answer suggests. 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.

Scotland is different. Scottish income tax bands have a separate structure (starter, basic, intermediate, higher, top with separate rates and a more granular structure below £43,663). NI is reserved (UK-wide, identical), so the NI portion is the same. Use a Scottish-specific calculator or Scotland-aware tax tools.