A bonus is taxed at your marginal rate, not your average rate — so it's often worth a lot less than the headline number. See what actually lands in your account, and whether it tips you into a higher band.
Your bonus isn't taxed at a special "bonus rate" — it's added on top of your salary and taxed at whatever rate applies to that slice of income.
If your salary already uses up your Basic Rate band, the bonus is taxed at 40% (or 45%) rather than 20%, plus National Insurance and student loan repayments on top. That's your marginal rate — usually higher than the average rate across your whole salary.
Some payroll systems tax a bonus even more heavily in that pay period, because PAYE assumes you'll earn that much every month. HMRC corrects this automatically over the rest of the tax year, so the annual figure above is the number that actually matters.
If your salary plus bonus pushes total income between £100,000 and £125,140, your Personal Allowance is withdrawn at £1 for every £2 over £100,000 — on top of the 40% band, creating an effective marginal rate close to 60% on that slice. Sacrificing some or all of the bonus into a pension keeps it out of taxable income entirely and is the standard way to sidestep this.
Rates and thresholds are for the 2026/27 tax year. This calculator estimates the annual, year-end impact of a bonus — the actual amount on your payslip the month it's paid may differ before HMRC reconciles it.