The Kept Pound UK take-home pay calculator

Guide · Published 1 November 2026

How your bonus is taxed

A bonus is taxed like the rest of your pay, so income tax, National Insurance and any student loan all come off it. But payroll works these out one pay period at a time, so the month your bonus lands can look quite different from the rest of the year.

The short answer

Your bonus is added to your pay for the period it's paid in, and taxed at your highest rate. Over a full year, as a rough guide, you keep:

Take off another 9p in every £1 if you repay a student loan.

What your bonus month looks like

Take someone earning £40,000 a year who gets a £5,000 bonus in October, which is month 7 of the tax year:

A normal monthBonus month
Pay£3,333.33£8,333.33
Income tax£457.00£1,457.00
National Insurance£182.83£334.17
Take-home pay£2,693.50£6,542.16

The bonus adds £3,848.66 to that month's take-home. The tax on it is exactly 20%, which is £1,000. National Insurance only goes up by £151.34, because NI is worked out on each month's pay separately. Pay above £4,189 in a single month is charged at just 2%, so a large one-off bonus can attract less NI than the same money spread over the year. Over a year, NI on £5,000 would normally be £400.

Our calculator works on yearly totals, so it shows the higher £400 figure. For most employees, the real NI on a bonus is a little lower, as in this example. Company directors are different, because their NI is worked out over the whole year.

Why it can look like you're paying 40%

Income tax on a normal tax code is worked out on your pay so far this tax year. If a big bonus is paid early in the year, in April or May, your pay to date can briefly go over that month's share of the higher-rate threshold. When that happens, part of the bonus is taxed at 40% on that payslip.

As long as your total pay for the year stays under £50,270, payroll gives that back gradually over the following months. If you're on an emergency code ending in W1, M1 or X, though, there's no catch-up, and you'll need to claim it back from HMRC.

When a bonus takes you over a threshold

The rate that matters is the one your total income reaches for the year. On a £48,000 salary, a £10,000 bonus takes you to £58,000. The first £2,270 of the bonus is taxed at 20%, and the remaining £7,730 at 40%, so the income tax on it comes to £3,546.

Watch out for these points too:

Student loan repayments

Student loan repayments are worked out on each payslip separately, with no look-back over the year. Someone on £25,000 with a Plan 2 loan normally repays nothing, because that's under the £29,385 threshold. But in a month with a £3,000 bonus, they'd repay about £237, even though their £28,000 for the year is still under the threshold. If that happens, you can ask the Student Loans Company for a refund after the tax year ends.

Paying your bonus into your pension

Many employers let you sacrifice some or all of a bonus into your pension. The money goes in before income tax and National Insurance, so:

Some employers also add the 15% National Insurance they save. The government has announced that from April 2029, only the first £2,000 a year of salary-sacrificed pension contributions will be free of National Insurance. The income tax saving isn't affected.

See what your own bonus is worth after tax.

Try a £5,000 bonus

Sources