Answers · UK 2025/26
How much tax do I pay on a £20,000 bonus on top of £100k salary?
A £20,000 bonus on top of £100k pushes you through the Personal Allowance taper trap. You lose ~£12,400 (62%) in tax+NI on the bonus due to combined 40% IT + 20% PA-taper + 2% NI. Pension salary sacrifice avoids this — recommended.
Full answer
UK bonus tax on £20,000 bonus + £100k salary = £120k 2025/26. PA taper: £20k over £100k loses £10k of PA, becoming taxable. Calculation. IT on bonus £20k at 40% = £8,000. Plus tax on £10k recovered PA at 40% = £4,000. Plus NI 2% × £20k = £400. Total extra tax+NI on bonus = £12,400 — effective rate 62%. Net take-home from £20k bonus: only £7,600. SOLUTION: pension salary sacrifice. £20k bonus → pension (instead of cash) gets full 42% relief AND restores PA. £20k pension contribution costs you nothing in tax now and secures £20k in pension for ~£7,600 forgone cash — vastly better, especially long-term. Employer also saves 15% NI which they may add to your pension.
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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.