UK Bonus Takehome Calculator 2025
Calculate Your Net Bonus After Tax, National Insurance & Deductions
Understanding Your Bonus Takehome Pay
Receiving a bonus is exciting, but understanding how much you'll actually take home after tax and deductions is crucial for financial planning. Our UK bonus takehome calculator helps you instantly calculate your net bonus after income tax, National Insurance contributions, student loan repayments, and pension contributions. Whether you're receiving a performance bonus, Christmas bonus, annual bonus, or commission payment, this calculator provides accurate results for the 2025/26 tax year.
The calculator accounts for marginal tax rates, showing you exactly how much of your bonus falls into each tax bracket. Many people are surprised to find their bonus is taxed at 40% or even 45% if it pushes their total income into higher rate bands. Use this tool to understand your bonus taxation and make informed decisions about pension contributions and financial planning.
Enter your annual salary and bonus amount above to see your takehome calculation
UK Bonus Tax Rates 2025/26: Complete Guide
Income Tax on Bonuses
- • Basic Rate (20%): £12,571 - £50,270
- • Higher Rate (40%): £50,271 - £125,140
- • Additional Rate (45%): Above £125,140
- • Personal allowance tapers above £100,000
- • Scotland has different rates with more tax bands
National Insurance on Bonuses
- • 8% on earnings £12,571 - £50,270
- • 2% on earnings above £50,270
- • No NI if you're over state pension age (66)
- • NI applies to total annual earnings
- • Calculated annually, not per payment
Frequently Asked Questions About Bonus Tax
How much tax will I pay on my bonus in the UK?
Your bonus is taxed at your marginal tax rate - the highest rate you pay on your income. This means if you're a basic rate taxpayer (20%), you'll pay 20% tax on your bonus. However, bonuses can push you into higher tax brackets. If your salary is £40,000 and you receive a £15,000 bonus, part of your bonus may be taxed at 40% (higher rate) once your total income exceeds £50,270. National Insurance also applies at 8% up to £50,270 and 2% above that threshold.
Will my bonus push me into a higher tax bracket?
Yes, bonuses can push you into a higher tax bracket because they're added to your annual salary for tax purposes. For example, if you earn £45,000 and receive a £10,000 bonus, your total income of £55,000 means £4,730 will be taxed at the higher rate of 40%. This is why you might notice you take home less than expected from your bonus - the portion that exceeds the basic rate threshold (£50,270) is taxed at a higher rate.
Why is my bonus taxed so heavily?
Bonuses feel heavily taxed because: 1) They're taxed at your marginal rate (the highest rate you pay), 2) They can push you into higher tax brackets, 3) National Insurance applies on top of income tax, 4) Your personal allowance may be reduced if your total income exceeds £100,000, and 5) Student loan repayments are calculated on your total annual income including bonuses. The effective tax rate on a bonus can be 40-60% for higher earners, but remember - you're still taking home money you wouldn't have had otherwise.
How do I calculate my net bonus after tax?
To calculate your net bonus: 1) Add your bonus to your annual salary to get total income, 2) Calculate income tax on total income minus tax on salary alone - the difference is tax on your bonus, 3) Do the same for National Insurance (8% rate between £12,570-£50,270, then 2% above), 4) Add student loan repayments if applicable (9% above threshold), 5) Subtract pension contributions if you're sacrificing salary. Use our calculator above for an instant, accurate calculation that accounts for all deductions and tax brackets.
Do bonuses get taxed more than salary?
No, bonuses don't get taxed at a different rate than salary - they're simply added to your annual income and taxed accordingly. However, they may feel more heavily taxed because: 1) They're taxed at your marginal rate (the highest rate you pay), not your average rate, 2) They can push you into higher tax brackets, meaning part of your bonus is taxed at 40% or 45%, 3) Your monthly salary may be taxed assuming you earn that amount all year, but a bonus increases your actual annual income. The UK uses an annual tax system, so by year-end, your bonus and salary are taxed the same way based on your total income.
What is the bonus tax rate in the UK for 2025?
There's no separate 'bonus tax rate' in the UK. Bonuses are taxed as regular income at the standard rates: 20% (basic rate) on income between £12,571-£50,270, 40% (higher rate) on £50,271-£125,140, and 45% (additional rate) above £125,140. National Insurance adds 8% on earnings £12,571-£50,270 and 2% above. This means your effective tax rate on a bonus could be 28% (basic rate + NI) or 42% (higher rate + NI) depending on your total income. Scotland has different rates with more tax bands.
Can I reduce tax on my bonus through pension contributions?
Yes! Pension contributions through salary sacrifice are one of the most effective ways to reduce tax on your bonus. If you contribute part of your bonus to your pension before tax, you'll reduce your taxable income. For example, if you're a higher rate taxpayer and put £5,000 of your bonus into your pension, you'll save £2,000 in income tax (40%) plus £400 in National Insurance (8%), giving you an effective 48% 'boost' to your pension. This works best for bonuses that push you into higher tax brackets.
How does National Insurance work on bonuses?
National Insurance (NI) is calculated on your total annual earnings, including bonuses. For 2025/26, you pay 8% NI on earnings between £12,570 and £50,270, then 2% on anything above £50,270. If you're over state pension age (currently 66), you don't pay NI at all. Your employer typically spreads NI throughout the year, but if you receive a large bonus, you may pay the higher 8% rate on more of it if your total income stays under £50,270, or pay the reduced 2% rate on the portion above that threshold.
Are Christmas bonuses taxed differently?
No, Christmas bonuses are taxed exactly the same as any other bonus or salary payment. Whether you receive your bonus at Christmas, as an annual performance bonus, or as commission, it's all treated as regular income and taxed at your marginal rate. The timing doesn't matter for annual tax purposes - HMRC looks at your total income for the tax year (April to April). However, the month you receive it might affect your monthly payslip due to how tax codes work throughout the year, but this evens out by year-end.
What if my bonus takes me over £100,000?
If your salary plus bonus exceeds £100,000, you'll start losing your personal allowance at a rate of £1 for every £2 earned above £100,000. This creates an effective tax rate of 60% on income between £100,000-£125,140 (40% income tax + 20% from losing the allowance, plus 2% NI). For example, if you earn £95,000 and get a £15,000 bonus, £10,000 of that bonus will be taxed at this punitive 60% rate. This is the highest effective tax rate in the UK system, making pension contributions particularly valuable at this income level.
Maximizing Your Bonus Takehome
Understanding marginal tax rates is crucial when receiving a bonus. Unlike your average tax rate (the percentage of your total income paid in tax), your marginal rate is the tax you pay on your last pound earned. If you're a basic rate taxpayer earning £40,000, your average tax rate might be around 15%, but any bonus you receive will be taxed at 20% (or 40% if it pushes you over £50,270).
Pension salary sacrifice is one of the most effective ways to increase your bonus takehome. By contributing part of your bonus to your pension before tax, you reduce your taxable income. For higher rate taxpayers, this means saving 40% income tax plus 2% National Insurance - effectively getting a 42% boost to your pension contribution. If your bonus pushes you into the £100,000-£125,140 bracket where personal allowance tapers, the tax saving increases to 60%.
Timing your bonus strategically can sometimes help manage your tax position. While you often can't control when your bonus is paid, understanding the tax year (April 6th to April 5th) can help you plan. If you're expecting a promotion or significant salary increase next year, it might be beneficial to receive your bonus in the current tax year when your salary is lower and the marginal rate on your bonus may be reduced.
Student loan considerations: If you have a student loan, remember that repayments are calculated on your total annual income. A large bonus can significantly increase your student loan repayment for that year. Plan 1 and Plan 2 loans both charge 9% on income above their respective thresholds (£24,990 and £27,295 for 2025/26), while postgraduate loans charge 6% above £21,000. These stack with your income tax and NI, potentially taking your marginal rate above 50%.