Bonus and commission tax calculator
Enter your current salary, what you have been paid so far this tax year and the payment you are about to get. It shows what lands on your payslip and what you finally keep once the year settles.
On your payslip you would keep
| Item | On your payslip | Once the tax year settles |
|---|---|---|
| Bonus or commission | ||
| Pension | ||
| Income tax | ||
| National Insurance | ||
| Student loan | ||
| You keep | ||
| Kept from each £1 | ||
| Added to your pension |
- Your take-home pay that month
- – with this payment– salary alone
- Your taxable pay for the tax year
- – including this payment
- Taken from this payment
- – in every £1, once the year settles
See how the size of the payment changes what you keep
| Payment | On your payslip | Once the year settles | Kept from each £1 |
|---|
If your salary changed part-way through the year, enter your own pay so far from your latest payslip. Months from this one on are taken at your current salary. Pension contributions are taken as a percentage of gross pay. It assumes a standard 1257L tax code, monthly pay and the 2026/27 rates for England, Wales and Northern Ireland. Other deductions, such as a company car benefit or gift aid, are not included. Student loan is taken from each month's pay, so a bonus is charged the full 9% once your pay is over the threshold.
How bonus and commission are taxed
There is no special tax rate for a bonus. It is added to your pay for the month and taxed at the same 20%, 40% and 45% rates as the rest of your income. What matters is how much of your pay for the year already sits in each band, which is why the same bonus can leave you with very different amounts depending on your salary and what you have been paid so far.
Payroll works out tax on your pay so far this tax year, and each month it allows you one twelfth of your personal allowance and basic-rate band. A bonus paid early in the year can therefore be taxed at 40% on your payslip even if your pay for the whole year stays in the 20% band. The extra tax comes back as lower tax in later months. The calculator shows what lands on your payslip and what you finally keep once the year settles.
National Insurance and student loan are worked out on each month’s pay on its own. National Insurance is 8% on pay between £1,048 and £4,189 a month and 2% above that, so on top of a salary that is already over £4,189 a month a bonus costs 2% in National Insurance. A student loan takes 9% of the bonus once your pay is over the plan threshold, or 6% for a postgraduate loan.
If your pay for the year goes over £100,000, each extra £1 costs more because your personal allowance is withdrawn, and it can cost you childcare support. Payroll does not apply that during the year, so part of the cost can arrive later through Self Assessment or a change to your tax code.
Common questions
How much tax will I pay on my bonus?
It depends on your salary and the rest of your pay for the year. A bonus is taxed at 20% on any part that falls within the basic-rate band, 40% on the part above £50,270 of income, and 45% above £125,140. National Insurance of 2% or 8% and any student loan come on top. Enter your figures in the calculator for your own result.
Why was my bonus taxed at 40% when I earn less than £50,270?
Payroll works on your pay so far this tax year, with one twelfth of your bands available each month. A large bonus paid early in the year can use up that month’s share of the basic-rate band, so part of it is taxed at 40% on your payslip. If your pay for the whole year stays under the higher-rate line, the extra tax comes back through lower tax in later months.
Is a bonus taxed more than normal pay?
No. It is taxed at the same rates. It can feel heavier because it is a large amount arriving in one month, and because pay so far this year is used to work out the tax.
Do I pay National Insurance on a bonus?
Yes. Employee National Insurance is charged on each month’s pay, at 8% between £1,048 and £4,189 a month and 2% above. If your salary is already over £4,189 a month, a bonus costs 2% in National Insurance.
Is student loan taken from a bonus?
Yes, if your pay for the month is over the threshold for your plan. The rate is 9% for Plans 1, 2, 4 and 5 and 6% for a postgraduate loan. Because it is worked out on each month’s pay, a bonus is charged the full rate once your pay is over the threshold.
Does it matter if my commission is paid monthly, quarterly or annually?
The tax for the whole year is the same if the total is. What changes is when the tax is taken. National Insurance and student loan are worked out on each month separately, so a payment in a month already over the thresholds costs more than the same money spread across several months.
What if my salary went up part-way through the year?
Enter your new salary as your current annual salary, and your gross taxable pay so far from your latest payslip, where it may be shown as taxable pay to date. That figure already includes the months at your old salary, so the tax on your bonus is worked out from what you have really been paid. The calculator then assumes your new salary for the rest of the year.
What if I have overpaid or underpaid tax so far this year?
Enter the income tax paid so far from your latest payslip, where it may be shown as tax paid to date or tax to date. If it is more than your tax code expects on your pay to date, payroll gives the difference back on the payslip your bonus arrives in. If it is less, the shortfall is taken then. A Month 1 or Week 1 code does not correct earlier months, so any difference stays until the year ends. Leave the box on the estimate if you do not know the figure. The calculator then assumes you have paid exactly the right amount.
Will I owe tax later on my bonus?
Possibly. If your tax code is standard and your pay for the year stays under £100,000, payroll collects the right amount by the end of the tax year. Tax can be due afterwards if your pay goes over £100,000, because payroll does not withdraw your personal allowance during the year. It can also be due or refundable if your tax code is a flat rate such as BR or D0, or ends in W1, M1 or X. The calculator shows an estimate in the box headed tax still to be collected or refunded.
What if my tax code is not 1257L?
Enter it. The calculator reads standard codes such as 1100L, K codes, 0T, BR, D0, D1 and NT, and codes ending in W1, M1 or X. A lower allowance in your code, for example because of a company car, is treated as correct. Scottish codes use Scottish rates, which the calculator does not cover.
How do salary sacrifice, net pay and relief at source differ?
With salary sacrifice the contribution comes off your pay before income tax and National Insurance, so it saves both. A net pay arrangement comes off before income tax but not National Insurance. With relief at source you pay 80% of the contribution from your take-home pay and the pension provider adds 20% tax relief. Higher and additional-rate taxpayers claim the rest back through Self Assessment or by asking HMRC to change their code. Your payslip or pension provider will say which one you have.
How can I keep more of a bonus?
If your employer offers salary sacrifice, paying part of the bonus into your pension means you pay no income tax or National Insurance on that part. It also lowers your adjusted net income, which helps if you are near £100,000. The adjusted net income calculator shows what that is worth.
Does the calculator work for Scotland?
No. It covers employees in England, Wales and Northern Ireland with a standard tax code and 2026/27 rates. Scotland sets its own income tax rates and bands.