Answers · UK 2025/26
How is bonus tax calculated in the UK?
A UK bonus is taxed as ordinary earned income through PAYE in the month it is paid. It is added to your salary for that pay period, so the marginal Income Tax rate (20%, 40% or 45%) and 8%/2% NI apply. There is no separate bonus tax.
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There is no distinct "bonus tax" in the UK. A bonus is treated as employment income and processed through PAYE in the pay period it is received. Because PAYE annualises monthly pay, a one-off bonus often pushes that month's earnings into a higher tax band — leading to apparent over-taxation that usually corrects itself across the tax year. Example: salary £48,000 + £10,000 bonus in March. The bonus tips you over the £50,270 higher-rate threshold, so £7,730 of it is taxed at 40% (£3,092), £2,270 at 20% (£454), plus 8% NI on most of it and 2% above the UEL. If the bonus pushes earnings between £100,000 and £125,140 you also lose Personal Allowance at £1 per £2, creating the 60% effective rate. Salary-sacrificing the bonus into a pension avoids Income Tax and NI entirely and is the most efficient way to receive a large bonus.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.