How much tax do I pay on a bonus?

A bonus is pay, so it carries income tax, National Insurance and any student loan repayment. Income tax is charged as if the bonus were the top slice of the year's pay: 20% up to £50,270 of total pay and 40% above it in England, Wales and Northern Ireland in 2026/27. A £10,000 bonus on a £40,000 salary leaves £7,749 after £2,000 of income tax and £251.34 of National Insurance.

Why is National Insurance on my bonus payslip different from the annual figure?

National Insurance is worked out on each pay period alone, not over the year. A monthly payslip uses the monthly thresholds: 8% on pay between £1,048 and £4,189, and 2% above £4,189. A bonus that lifts one month above £4,189 is charged 2% on the part above it, even when pay for the whole year is below the annual limit of £50,270. In the example above the bonus month carries £251.34 more National Insurance, where an annual calculation gives £800.00.

Is a bonus taxed at a higher rate than salary?

No. There is no separate bonus rate. A bonus can look heavily taxed on the payslip because it sits on top of salary, so more of it falls in a higher band, and because PAYE spreads allowances evenly through the year. Over the tax year the income tax is the same as on any other pay of that amount.

Do I repay more student loan in a bonus month?

Yes. Repayments are worked out on each month's pay against a twelfth of the annual threshold. For a Plan 2 loan in 2026/27 that is 9% of pay above £2,448.75 in the month, so a bonus month repays 9% of the whole bonus once normal pay is above that figure.

What changes for bonuses in 2027/28?

The annual and weekly thresholds for 2027/28 have been announced, but the monthly National Insurance thresholds have not been published yet, so the tool does not show a 2027/28 result. It will once gov.uk publishes them.

Calculators

Bonus tax calculator

Tax year 2026/27, for England and Northern Ireland, Scotland, Wales. Shows the income tax, National Insurance and student loan on a one-off bonus paid with a monthly salary, and what is left.

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Kept from your bonus

£3,849after deductions

Income tax: £1,000
National Insurance: £151
Share kept: 76.97%

National Insurance on the bonus is £151.34 in the month it is paid, not the £400.00 an annual calculation gives, because each pay period has its own thresholds.

Under 2027/28 this result cannot be shown yet: Annex A to the Budget 2026 overview gives the 2027/28 thresholds per week only (£242 and £967). The monthly figure is published on the employer rates page before the tax year starts.

The working

What is taken from a £5,000 bonus on a £40,000 salary in 2026/27
Line	Rate	On	Amount	Source
			£40,000.00
£40,000.00 a year is £3,333.33 in a normal month.
			£5,000.00
Paid in one month, making that month's pay £3,333.33 + £5,000.00 = £8,333.33.
	20%	£5,000.00	−£1,000.00	gov.uk
PAYE adds pay up over the tax year, so the bonus is taxed as the top slice of the year's pay. Income tax on £40,000.00 is £5,486.00; on £45,000.00 it is £6,486.00. The difference is £1,000.00. The bonus payslip can show more or less than this, with the rest evened out over the other months. Checked 7 November 2026, in force.
	3.03%	£5,000.00	−£151.34	gov.uk
National Insurance looks at each pay period alone. In the bonus month, pay between £1,048 and £4,189: £3,141.00 × 8% = £251.28; pay above £4,189: £4,144.33 × 2% = £82.89. That is £334.17, against £182.83 in a normal month, so the bonus adds £151.34. Spread across the year the same bonus would add £400.00: the annual figure uses twelve months of thresholds, the payslip uses one. Checked 9 November 2026, in force.
	76.97%	£5,000.00	£3,848.66
£5,000.00 − £1,151.34 = £3,848.66, which is 76.97% of the bonus.

How this is calculated

Income tax. PAYE adds pay up over the tax year. The tax on the bonus is the tax on salary plus bonus, less the tax on salary alone.
National Insurance. Each pay period stands alone. The bonus month is salary for one month plus the bonus, charged at 8% between £1,048 and £4,189 and 2% above. The tool subtracts a normal month to leave the amount the bonus adds.
Student loan. Also per pay period: the plan rate on the month's pay above a twelfth of the annual threshold, rounded down to a pound.
What is kept. The bonus less those three.

This is why a bonus payslip differs from a twelfth of the annual figures: income tax looks at the year so far, while National Insurance and student loan repayments look only at the month. The rounding conventions are listed in the methodology.

Rules used

Tax year: 2026/27 (6 April 2026 to 5 April 2027)
Nation: England and Northern Ireland
Figures: Checked between 7 November 2026 and 9 November 2026. Status: in force.
Next scheduled change: 6 April 2027
Every figure: Rates and allowances for 2026/27, each with its source and the date it was checked.
Sources used: Income tax rates, checked 7 November 2026
National insurance rates letters, checked 9 November 2026
Rates and thresholds for employers 2026 to 2027, checked 9 November 2026

What changes on 6 April 2027

None of the figures this result uses changes on that date, as far as 2027/28 has been announced.

Not yet set for 2027/28: Scottish income tax bands and rates; Primary threshold, monthly pay period; Upper earnings limit, monthly pay period; Plan 1 threshold; Plan 4 threshold; Plan 5 threshold; Postgraduate loan threshold.

Switch the tax year in the form to see the result under 2027/28 as announced so far. The Budget 2026 page lists every measure, including those that do not touch this result.

What this does not do. It assumes a monthly-paid employee on the standard tax code with one job. It does not model company directors, whose National Insurance is worked out over the year, weekly or four-weekly pay, a bonus given up for pension contributions, or benefits in kind. It never suggests what to do with a bonus.

Questions people ask

How much tax do I pay on a bonus?: A bonus is pay, so it carries income tax, National Insurance and any student loan repayment. Income tax is charged as if the bonus were the top slice of the year's pay: 20% up to £50,270 of total pay and 40% above it in England, Wales and Northern Ireland in 2026/27. A £10,000 bonus on a £40,000 salary leaves £7,749 after £2,000 of income tax and £251.34 of National Insurance.
Why is National Insurance on my bonus payslip different from the annual figure?: National Insurance is worked out on each pay period alone, not over the year. A monthly payslip uses the monthly thresholds: 8% on pay between £1,048 and £4,189, and 2% above £4,189. A bonus that lifts one month above £4,189 is charged 2% on the part above it, even when pay for the whole year is below the annual limit of £50,270. In the example above the bonus month carries £251.34 more National Insurance, where an annual calculation gives £800.00.
Is a bonus taxed at a higher rate than salary?: No. There is no separate bonus rate. A bonus can look heavily taxed on the payslip because it sits on top of salary, so more of it falls in a higher band, and because PAYE spreads allowances evenly through the year. Over the tax year the income tax is the same as on any other pay of that amount.
Do I repay more student loan in a bonus month?: Yes. Repayments are worked out on each month's pay against a twelfth of the annual threshold. For a Plan 2 loan in 2026/27 that is 9% of pay above £2,448.75 in the month, so a bonus month repays 9% of the whole bonus once normal pay is above that figure.
What changes for bonuses in 2027/28?: The annual and weekly thresholds for 2027/28 have been announced, but the monthly National Insurance thresholds have not been published yet, so the tool does not show a 2027/28 result. It will once gov.uk publishes them.

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