See what your bonus is actually worth after income tax, National Insurance and student loan — and what it would be worth paid into your pension instead. 2026/27 rates.
An extra 6% on earnings above the postgraduate threshold
From a £5,000.00 bonus you take home
£3,600.00
That's 72.0% of the bonus — 28.0% goes in deductions.
Income tax
£1,000.00
on the bonus
Employee NI
£400.00
on the bonus
Student loan
£0.00
no plan selected
Marginal rate
20%
on your next £1
As cash
£3,600.00
in your bank account
Into pension
£5,000.00
invested, take-home unchanged
Sacrificing the bonus puts £1,400.00 more to work, because the money never becomes pay — so no tax, NI or student loan comes off it.
Your employer also saves £750.00in employer NI. Some add that to your pension too, but they don't have to — worth asking. Pension money is locked away until at least 55 (57 from 2028).
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See how the widget worksA bonus is ordinary earnings. It attracts exactly the same income tax and National Insurance as your salary — there is no separate bonus tax, and no special rate. What makes it feel punitive is that it stacks on top of your salary, so every pound of it is taxed at your highest rate, with none of it sheltered by your personal allowance.
| Your salary | Income tax | Employee NI | You keep |
|---|---|---|---|
| Under £12,570 | 0% | 0% | 100% |
| £12,570 – £50,270 | 20% | 8% | 72% |
| £50,270 – £100,000 | 40% | 2% | 58% |
| £100,000 – £125,140 | 40% + allowance taper | 2% | ~38% |
| Over £125,140 | 45% | 2% | 53% |
Scottish taxpayers have different bands and rates — select Scotland above for the right figures. Student loan repayments come off on top of all of these.
Between £100,000 and £125,140 of adjusted net income, your £12,570 personal allowance tapers away at £1 for every £2 earned. You lose allowance as well as paying 40% on the income itself, giving an effective rate of about 60% on that slice, plus 2% National Insurance.
A bonus that lands in this band is the most heavily taxed money you will ever earn. It is also where pension sacrifice is worth most: sacrificing enough to bring adjusted net income back under £100,000 restores the allowance pound for pound, so the effective relief on that contribution is around 60%.
PAYE works on a cumulative basis and can treat a one-off bonus as though you will receive it every month, temporarily deducting at a higher rate than you owe. This corrects itself in later payslips in the same tax year, or as a refund after year end. This calculator shows the true annual position — what you should end up with once PAYE settles.
If your employer offers bonus sacrifice, you give up the bonus before it is paid and it goes into your pension instead. Because it never becomes pay, it escapes income tax, employee National Insurance and student loan repayments. A higher-rate taxpayer keeping 58% of a bonus as cash gets 100% of it working in a pension instead.
The trade-off is access: pension money is locked away until at least age 55, rising to 57 in 2028. Your employer saves 15% employer NI on anything sacrificed, and some pass that saving into the pension as well — it is always worth asking, because they are not required to.
To see the effect across a whole year rather than a single bonus, use the salary sacrifice calculator. For your overall position, the take-home pay calculator shows the full breakdown.