Bonus Tax Calculator UK 2026/27
A bonus month's payslip confuses everyone: tax looks huge, NI looks tiny. Both are correct. This calculator shows the real deductions on a one-off bonus, the way UK payroll actually works.
| Income tax on the bonus (annual effect) | £1,000 |
|---|---|
| National Insurance (single pay period) | £151 |
| Bonus in your pocket | £3,849 |
- NI and student loans are charged per pay period. A one-off bonus above the monthly upper earnings limit pays only 2% NI on the excess, which is why big bonuses often keep MORE per pound than a raise would.
- Income tax shown is the true annual effect; cumulative PAYE may take more in the bonus month and refund it over the following months.
- Assumptions: 2026/27, tax code 1257L/S1257L, monthly pay, bonus paid in one month, no pension. Salary sacrifice into a pension is the main way to keep more. See the guide.
Why the bonus month looks strange
Income tax is cumulative over the year, so a spike in one month is smoothed out: the annual effect is simply your marginal rate on the bonus. National Insurance is the opposite: it is charged per pay period with no memory, so once the bonus pushes that single month above the upper earnings limit (£4,189), the excess pays just 2% NI. A £10,000 bonus can therefore carry less NI than £10,000 of extra salary spread over the year, one of the few quirks that works in your favour.
Keeping more of it
Salary-sacrificing the bonus into your pension avoids income tax and NI entirely at the moment of sacrifice: for a higher-rate taxpayer that turns £5,800 in-pocket into £10,000 invested (details in the salary sacrifice guide). Between £100,000 and £125,140 the 62% marginal zone makes sacrifice especially compelling; check your marginal rate in the salary calculator.
Frequently asked questions
Why is my bonus taxed so heavily?
Your bonus is added to your earnings for the pay period, which can push the combined figure into a higher tax band for that month. It is taxed at your marginal rate, not an extra rate.
Can I put my bonus into a pension to reduce tax?
Yes. A salary sacrifice arrangement or a direct personal pension contribution reduces the taxable amount of your bonus. Enter a pension amount in the calculator to see the effect.
Does my bonus affect my tax code?
A one-off bonus does not normally change your tax code. However, if HMRC estimates your total income will be higher because of it, your code may be adjusted.