UK Bonus Tax Calculator 2025/26
How to use this calculator
- Enter Annual Salary: Input your gross annual salary before any deductions.
- Enter Bonus Amount: Input the gross amount of the bonus you are receiving.
- Select Tax Residence: Choose where you live as income tax rates differ across the UK.
- Provide Pension Details: Enter your contribution percentage and whether it's a salary sacrifice scheme.
- Select Student Loan Plan: If you have one, choose your student loan plan.
- Review Your Results: The calculator instantly shows your net bonus take-home and a full breakdown of deductions.
This is an estimate for the 2025/26 tax year. Assumes standard tax code 1257L and that you are not in a director's NI category. Always consult an official payslip or financial advisor for exact figures.
UK Bonus Tax 2025/26 (Complete Guide)
Your bonus gets added to your yearly income and taxed at normal rates in the UK. This means 20% basic rate, 40% higher rate, or 45% additional rate, plus National Insurance at 8% or 2%.
Quick facts for UK bonus tax in 2025/26:
- Basic rate taxpayers: Pay 20% income tax + 8% National Insurance
- Higher rate taxpayers: Pay 40% income tax + 2% National Insurance
- Additional rate taxpayers: Pay 45% income tax + 2% National Insurance
- Tax-free allowance: £12,570 (no tax on income up to this amount)
- Higher rate threshold: £50,270
UK Tax Bands 2025/26
The UK tax system uses bands to determine how much tax you pay. For 2025/26, the personal allowance remains at £12,570, with the higher rate threshold at £50,270.
Income Tax Rates 2025/26
If you live in England, Wales or Northern Ireland, there are three income tax bands: basic rate (20%), higher rate (40%), and additional rate (45%).
| Tax Band | Income Range | Tax Rate | Annual Tax on Band |
|---|---|---|---|
| Personal Allowance | £0 - £12,570 | 0% | £0 |
| Basic Rate | £12,571 - £50,270 | 20% | £7,540 |
| Higher Rate | £50,271 - £125,140 | 40% | £29,948 |
| Additional Rate | Over £125,140 | 45% | Varies |
National Insurance Rates 2025/26
National Insurance rates for 2025/26 are 8% on earnings up to £50,270 and 2% on earnings above this threshold.
| Earnings Range | National Insurance Rate | Who Pays This Rate |
|---|---|---|
| £0 - £12,570 | 0% | Everyone |
| £12,571 - £50,270 | 8% | Basic rate taxpayers |
| Over £50,270 | 2% | Higher and additional rate taxpayers |
How Bonuses Are Taxed in the UK
Your bonus is added to your annual salary to work out your total taxable income. This combined amount determines which tax bands apply. Your employer takes tax and National Insurance through PAYE when they pay your bonus.
Here's how it works:
- Your bonus gets added to your yearly salary
- The total amount determines your tax band
- Each part of your income gets taxed at the right rate
- Tax and National Insurance come off automatically
Bonus Tax Examples 2025/26
Example 1: Basic Rate Taxpayer
Salary: £35,000 per year
Bonus: £5,000
Total income: £40,000 (still in basic rate band)
- Income tax on bonus: £5,000 × 20% = £1,000
- National Insurance: £5,000 × 8% = £400
- Total deductions: £1,400
- Take-home bonus: £3,600
Example 2: Higher Rate Taxpayer
Salary: £45,000 per year
Bonus: £10,000
Total income: £55,000 (pushes into higher rate band)
- Basic rate portion: £5,270 × 20% = £1,054
- Higher rate portion: £4,730 × 40% = £1,892
- National Insurance: £10,000 × 8%/2% = £774
- Total deductions: £3,720
- Take-home bonus: £6,280
Bonus Sacrifice
Bonus sacrifice lets you put your bonus straight into your pension before tax is taken. This saves you income tax and National Insurance.
Benefits of bonus sacrifice:
- Avoid income tax completely on the bonus amount
- Skip National Insurance payments
- Get tax relief on pension contributions
- Reduce your total taxable income
Remember: You cannot access this money until retirement age, so only use bonus sacrifice if you don't need the cash now.
Special Rules for Bonuses
Non-Cash Bonuses
Non-cash bonuses like company cars or private health insurance get taxed through the benefit-in-kind system with different rules.
Personal Allowance Tapering
If your total income exceeds £100,000, you lose £1 of personal allowance for every £2 earned above this limit. This means you effectively pay 60% tax on income between £100,000 and £125,140.
High earners face extra tax:
- Income £100,000-£125,140: Lose personal allowance gradually
- Effective tax rate: 60% (40% normal rate + 20% allowance loss)
- Income over £125,140: No personal allowance, 45% tax rate
Bonus vs Salary: Tax Comparison
There's no tax difference between bonuses and salary - both get taxed the same way. However, timing can matter:
| Payment Type | Tax Treatment | Benefits | Drawbacks |
|---|---|---|---|
| Salary | Spread over 12 months | Steady tax payments | Higher monthly tax if in higher band |
| Bonus | Added to annual income | May stay in lower tax band | Can push into higher tax band |
| Pension Contribution | Before tax taken | No tax or National Insurance | Money locked until retirement |
Frequently Asked Questions
How much tax do I pay on my bonus in the UK 2025?
Your bonus is added to your yearly income and taxed at normal rates. This means 20% basic rate, 40% higher rate, or 45% additional rate, plus 8% National Insurance (2% if you earn over £50,270).
What are UK tax bands for 2025/26?
Personal allowance is £12,570 (tax-free). Basic rate is 20% on income £12,571-£50,270. Higher rate is 40% on income £50,271-£125,140. Additional rate is 45% on income over £125,140.
Can I avoid tax on my bonus UK?
You can use bonus sacrifice to put your bonus into your pension before tax. This avoids income tax and National Insurance but you cannot access the money until retirement age.
Do I pay National Insurance on bonuses?
Yes, bonuses are subject to National Insurance at 8% for earnings up to £50,270 and 2% for earnings above £50,270 in 2025/26.
Why is my bonus taxed more than my salary?
Your bonus pushes your total yearly income into higher tax bands. If your salary plus bonus exceeds £50,270, the extra amount gets taxed at 40% instead of 20%.
When do I pay tax on my bonus UK?
Tax and National Insurance are taken automatically through PAYE when your employer pays your bonus. No extra action needed unless you're self-employed.