Bonus Tax Calculator 2026/27
A bonus is taxed under PAYE at your marginal income tax rate. If your salary is in the 20% band, any bonus above £50,270 is partly taxed at 40%. Add employee NI (8% up to £50,270, 2% above) and a higher earner's effective rate can exceed 48%. Enter salary and bonus below.
Figures verified against HMRC PAYE & NI rates on .
Written by James HartleyCIMA
Calculator
Your regular gross salary - used to determine which tax band your bonus falls into.
Gross bonus before any deductions.
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How Bonus Tax Calculator 2026/27 Works
This calculator works out the marginal tax cost of your bonus by computing your total tax with and without it. The difference is the true cost of your bonus in tax and NI.
Step 1: Determine your marginal rate
We calculate your income tax on your base salary, then add your bonus on top and recalculate. The additional tax is entirely attributable to the bonus.
Step 2: National Insurance
The same approach applies for NI. If your base salary is already above £50,270, your bonus is only charged at 2%. If your base is below this threshold and the bonus pushes you above it, you'll pay 8% on the portion below the upper earnings limit and 2% above.
Pension planning tip
If you can arrange for your bonus to be paid into your pension as salary sacrifice, you save both the income tax AND the NI, making pension contributions highly efficient for bonus earners.
Frequently Asked Questions
Bonuses are taxed as employment income under PAYE. HMRC treats your bonus as part of your total salary for the year. The key is your marginal rate: if your base salary is £40,000 and you get a £10,000 bonus, the first £10,270 of the bonus falls into the basic rate (20%), and the remaining amount hits the 40% higher rate.
This is because of your cumulative tax position. If you receive a bonus mid-year, HMRC may temporarily apply a higher rate to account for the uplift in your annual income. Once reconciled at year-end, any overpayment is returned. Payroll software also sometimes uses the M1/W1 basis for bonuses.
Yes. The most effective way is to pay your bonus directly into your pension via salary sacrifice. The bonus is contributed before tax and NI, potentially saving you 28-48% depending on your marginal rate. Your employer may also save employer NI (15%) and may pass some savings to you.
Yes. Employee Class 1 NI is charged on bonuses at the same rates as regular salary: 8% on earnings between £12,570 and £50,270, and 2% above that. Employer NI (15%) is also paid on the bonus by your employer, though this doesn't come out of your take-home pay.
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Official Rates Used
This calculator uses official HMRC rates for 2026/27. View the current rates at GOV.UK:
Rates last verified:
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.