UK Bonus Tax Calculator: Lump Sum Take-Home Pay
Expecting a performance bonus, annual commission, or overtime payment? Enter your regular annual salary and bonus amount below to see exactly how much you take home after statutory Income Tax, National Insurance, pension contributions, and student loans.
Statutory Compliance: Reviewed and verified against HMRC 2026/27 PAYE specifications (HMRC PAYE Tax Tables, NIC Rates & Thresholds). Last updated March 2026.
1. Salary & Bonus Amounts
2. Deductions & Pension
Bonus Calculation Results
Calculating your take-home pay...
Monthly Payslip Comparison: Normal Month vs. Bonus Month
| Payslip Component | Normal Month | Bonus Month | Net Bonus Impact |
|---|
How to Use This Calculator (Step-by-Step)
Follow these five steps to find out exactly how much of your lump-sum bonus you keep after tax:
- Step 1 — Enter Your Base Annual Salary: Type in your contracted gross yearly salary (excluding the bonus) to establish your baseline tax bracket.
- Step 2 — Enter Your Bonus or Lump Sum: Enter the gross amount of your anticipated bonus, commission, or overtime payout.
- Step 3 — Configure Your Pension & Student Loan: Select your workplace pension percentage and plan (e.g. Plan 1, 2, 4, 5, or Postgraduate).
- Step 4 — Test Bonus Sacrifice (Optional): Check the "Sacrifice some or all of bonus into pension" box to see how much tax and National Insurance you can legally avoid by transferring the bonus straight into your retirement pot.
- Step 5 — Review Your Payslip Comparison: View the side-by-side comparison table showing your standard monthly payslip vs. your bonus month payslip, net cash retained, and your marginal deduction rate.
Understanding How Bonuses Are Taxed in the UK (2026/27)
Receiving an unexpected bonus or hard-earned overtime payout should be a cause for celebration. However, many UK employees open their payslip only to be disappointed by how much of their bonus has disappeared into deductions. Understanding how HMRC PAYE cumulative tax tables calculate one-off payments helps you budget accurately and avoid common tax traps.
1. Why Does HMRC Tax Bonuses So Heavily Under PAYE?
Under the UK Pay As You Earn (PAYE) system, your employer's payroll software does not know whether an extra payment is a one-off bonus or a permanent wage rise. In the specific month you receive the bonus, the software calculates your tax as if you were going to earn that higher monthly amount for all 12 months of the tax year.
For example, if your standard monthly pay is £3,333 (£40,000 annual) and you receive a £5,000 bonus, your gross pay in that month is £8,333. The payroll algorithm annualizes this to £100,000 and applies Higher Rate (40%) tax to the portion above the monthly threshold.
2. Will I Get Overpaid Tax Back?
Because the UK PAYE system is cumulative, your tax position automatically recalculates in subsequent pay periods. If the bonus caused you to pay 40% tax in month 6, but your total annual income for the full tax year remains below £50,270, you will pay less tax in months 7 through 12, or receive an automatic refund from HMRC (via P800 calculation) after the tax year ends on 5 April.
3. The Upper Earnings Limit (UEL) Silver Lining for National Insurance
Unlike Income Tax, National Insurance is strictly non-cumulative—each pay period stands completely alone. Standard Class 1 Employee NI is charged at 8% on earnings between the Primary Threshold (£1,048/month) and the Upper Earnings Limit (£4,189/month in 2026/27). Any earnings above £4,189 in that month are charged at just 2% National Insurance.
Because a bonus elevates your pay above the monthly Upper Earnings Limit, the bonus itself typically attracts only 2% NI rather than 8%, meaning you keep 6% more than you might expect on that specific deduction.
4. The £100,000 Personal Allowance Taper (The 60% Tax Trap)
If your base salary plus bonus exceeds £100,000, you enter the UK's most aggressive marginal tax band. For every £2 your adjusted net income exceeds £100,000, your tax-free Personal Allowance (£12,570) is reduced by £1. This results in an effective 60% marginal income tax rate on earnings between £100,000 and £125,140.
If you have an undergraduate student loan (9%), your combined marginal deduction rate reaches 71%, meaning you take home only £290 of every £1,000 bonus.
5. How Bonus Sacrifice Protects Your Earnings
To legally bypass this tax spike, many UK employers offer Bonus Sacrifice (also known as a bonus pension waiver). By agreeing to transfer some or all of your bonus into your workplace pension scheme before payroll runs:
- You pay 0% Income Tax, 0% National Insurance, and 0% Student Loan on the sacrificed amount.
- 100% of the gross bonus lands directly into your retirement fund.
- Your adjusted net income is reduced, preserving your £12,570 Personal Allowance and your eligibility for Tax-Free Childcare and the 30 hours free childcare subsidy.