Ask PayslipIQ · Last reviewed 2026-05-08
How is a bonus taxed in the UK?
A bonus is taxed at the same income tax and NI rates as your regular pay, but because PAYE assumes the bonus repeats every pay period, it can briefly push you into a higher tax band for that one period. If you are on a cumulative tax code, this normally evens out across the rest of the year.
PayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, payroll, accounting, pension, benefits or employment advice. Always verify your payslip, tax code, deductions and take-home pay with your employer's payroll department, HMRC, your pension provider, a qualified accountant, tax adviser or another appropriately qualified professional.
If your bonus is paid in a single month and you are on a cumulative tax code, PAYE will rebalance later. The total tax over the year matches what you should have paid on your total earnings.
If your bonus pushes your full year earnings above £100,000, the personal allowance starts to taper away (you lose £1 of allowance for every £2 above £100,000). That can create an effective marginal rate of 60% on the income between £100,000 and £125,140.
Salary sacrificing part of a bonus into your pension can be efficient at high income levels because it saves both tax and NI on the sacrificed amount.
Related
Reviewed by PayslipIQ Editorial. Sources cited where applicable.
PayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, payroll, accounting, pension, benefits or employment advice. Always verify your payslip, tax code, deductions and take-home pay with your employer's payroll department, HMRC, your pension provider, a qualified accountant, tax adviser or another appropriately qualified professional.