How is a UK bonus taxed?

A bonus is taxed as ordinary employment income through PAYE. There is no special "bonus tax rate" - the bonus stacks on top of your annual salary and is taxed at whatever marginal rates apply. In practice many payroll systems withhold extra tax in the bonus month under cumulative PAYE; this evens out across the year so the annual tax due is the same regardless of how it was spread.

What is the marginal rate on a bonus inside the £100k-£125,140 band?

Approximately 62% - 40% Income Tax + 2% National Insurance + 20% equivalent from the Personal Allowance taper. Every £1 of bonus that lands in this band keeps only 38p. Salary-sacrificing the bonus into pension before payment avoids this entirely - the full £1 lands in pension without being taxed.

Should I salary-sacrifice my bonus into pension?

It depends on your marginal rate and pension circumstances. The sacrificed bonus avoids both Income Tax and employee NI, so it is highly tax-efficient - especially in the £100k-£125,140 band where each cash pound costs 62p in tax. The trade-off is liquidity: pension money is locked until age 57 (rising to 58 in 2028). For high earners with adequate liquid savings, sacrificing the bonus is usually the right call.

Why was so much tax taken out of my bonus payslip?

PAYE typically uses a cumulative method that estimates your total annual income from the year-to-date figure and applies the appropriate rates. A large one-off bonus in (say) month 6 looks to PAYE like you are now earning double, so it withholds at the higher rate. Over the remaining months the system gradually corrects the over-withholding. The annual total comes out right.

Does Scotland tax bonuses differently?

Scotland has its own Income Tax bands above the UK Personal Allowance, so the rates applied to a Scottish bonus are different from the rest-of-UK. National Insurance is UK-wide and the same. The calculator above lets you switch region to match where you live.

Are sign-on bonuses taxed the same?

Yes - any contractual bonus, sign-on bonus, retention bonus or performance bonus paid through payroll is taxed as employment income. The only common bonus type with different treatment is a bonus paid into a separate Share Incentive Plan or other tax-advantaged scheme - those follow specific HMRC rules and are usually NOT taxed at the marginal rate.

Tax on a £15,000 Bonus UK 2026/27

How much of a £15,000 UK bonus you actually keep depends entirely on your salary before the bonus. A £15,000 bonus on a £30,000 salary leaves the most cash in your pocket; the same bonus on a £105,000 salary can lose 62% to tax through the £100k Personal Allowance taper. Figures below assume England rest-of-UK rates and no pension contribution.

Take-home from a £15,000 bonus by base salary

Base salary	Bonus take-home	Effective marginal	Pension sacrifice value
£30,000	£10,800	28.0%	£15,000
£50,000	£8,738	41.7%	£15,000
£70,000	£8,700	42.0%	£15,000
£100,000	£5,700	62.0%	£15,000
£130,000	£7,950	47.0%	£15,000

Pension sacrifice value: the full £15,000 lands in the pension pot, free of Income Tax and employee NI. The "saving" vs cash is the difference between £15,000 and the cash take-home in the table above.

Worst marginal in the ladder

At a base salary of £100,000, the effective marginal rate on a £15,000 bonus is 62.0% - meaning only £5,700 of the £15,000 reaches your bank account. Salary-sacrificing the bonus into pension keeps the full £15,000 in your pot at the cost of liquidity (pension money is locked until age 57+).

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Frequently asked questions

How is a UK bonus taxed?: A bonus is taxed as ordinary employment income through PAYE. There is no special "bonus tax rate" - the bonus stacks on top of your annual salary and is taxed at whatever marginal rates apply. In practice many payroll systems withhold extra tax in the bonus month under cumulative PAYE; this evens out across the year so the annual tax due is the same regardless of how it was spread.
What is the marginal rate on a bonus inside the £100k-£125,140 band?: Approximately 62% - 40% Income Tax + 2% National Insurance + 20% equivalent from the Personal Allowance taper. Every £1 of bonus that lands in this band keeps only 38p. Salary-sacrificing the bonus into pension before payment avoids this entirely - the full £1 lands in pension without being taxed.
Should I salary-sacrifice my bonus into pension?: It depends on your marginal rate and pension circumstances. The sacrificed bonus avoids both Income Tax and employee NI, so it is highly tax-efficient - especially in the £100k-£125,140 band where each cash pound costs 62p in tax. The trade-off is liquidity: pension money is locked until age 57 (rising to 58 in 2028). For high earners with adequate liquid savings, sacrificing the bonus is usually the right call.
Why was so much tax taken out of my bonus payslip?: PAYE typically uses a cumulative method that estimates your total annual income from the year-to-date figure and applies the appropriate rates. A large one-off bonus in (say) month 6 looks to PAYE like you are now earning double, so it withholds at the higher rate. Over the remaining months the system gradually corrects the over-withholding. The annual total comes out right.
Does Scotland tax bonuses differently?: Scotland has its own Income Tax bands above the UK Personal Allowance, so the rates applied to a Scottish bonus are different from the rest-of-UK. National Insurance is UK-wide and the same. The calculator above lets you switch region to match where you live.
Are sign-on bonuses taxed the same?: Yes - any contractual bonus, sign-on bonus, retention bonus or performance bonus paid through payroll is taxed as employment income. The only common bonus type with different treatment is a bonus paid into a separate Share Incentive Plan or other tax-advantaged scheme - those follow specific HMRC rules and are usually NOT taxed at the marginal rate.