Bonus of GBP 20,000 after tax

Scenario

A £20,000 bonus is a headline number that can shape how attractive a job offer appears. But bonuses are taxed as marginal income — layered on top of your regular salary — which means a large bonus can have a significant portion taxed at 40%. This page shows exactly how the numbers work at three different salary levels.

Salary of £30,000 — fully in the basic-rate band

At £30,000, adding £20,000 produces a combined gross of £50,000. That sits just below the higher-rate threshold of £50,270, so the entire bonus stays in the basic-rate band.

| Deduction | Rate | Amount | |---|---|---| | Income tax | 20% | £4,000 | | Employee NI | 8% | £1,600 | | Total deductions | | £5,600 | | Net bonus | | £14,400 |

You keep 72% of the headline bonus. If your base salary were even slightly higher — say £31,000 — the final £730 of the bonus would tip into higher rate and reduce the net amount.

Salary of £35,000 — bonus straddles the threshold

At £35,000, the higher-rate threshold is £15,270 above your base (£50,270 minus £35,000). The first £15,270 of the bonus fills the remaining basic-rate band; the remaining £4,730 crosses into higher rate.

Basic-rate slice (first £15,270):

| Deduction | Rate | Amount | |---|---|---| | Income tax | 20% | £3,054 | | Employee NI | 8% | £1,222 | | Deductions on this slice | | £4,276 | | Net on this slice | | £10,994 |

Higher-rate slice (remaining £4,730):

| Deduction | Rate | Amount | |---|---|---| | Income tax | 40% | £1,892 | | Employee NI | 2% | £95 | | Deductions on this slice | | £1,987 | | Net on this slice | | £2,743 |

Total net bonus: £10,994 + £2,743 = £13,737. You keep 68.7%.

The threshold crossing costs you roughly £663 versus a scenario where the entire bonus had stayed at basic rate.

Salary of £60,000 — fully in the higher-rate band

At £60,000 you are already above £50,270, so the entire £20,000 bonus is taxed at higher rate. Employee NI above £50,270 is only 2%.

| Deduction | Rate | Amount | |---|---|---| | Income tax | 40% | £8,000 | | Employee NI | 2% | £400 | | Total deductions | | £8,400 | | Net bonus | | £11,600 |

You keep 58% of the gross bonus. Almost £8,400 goes directly to HMRC and NI, leaving just over half the headline figure as spendable cash.

With Plan 2 student loan at £35,000

Plan 2 repayments apply at 9% on earnings above £27,295. At a base salary of £35,000, the repayment threshold is already crossed. Adding a £20,000 bonus means 9% is owed on the full £20,000 bonus.

| Deduction | Amount | |---|---| | Income tax (split-band) | £4,946 | | Employee NI (split-band) | £1,317 | | Plan 2 repayment (9%) | £1,800 | | Total deductions | £8,063 | | Net bonus | £11,937 |

With Plan 2 active at £35,000 you keep approximately 59.7% of the gross bonus.

Summary table: net bonus across salary levels

| Base salary | Threshold crossed? | Net bonus (no student loan) | Net bonus (Plan 2) | |---|---|---|---| | £30,000 | No | £14,400 | £12,600 | | £35,000 | Partially | £13,737 | £11,937 | | £60,000 | Fully | £11,600 | — |

What this means in practice

The difference between 72% and 58% retention is the difference between keeping £14,400 and keeping £11,600 on the same £20,000 gross bonus. That £2,800 swing is driven entirely by where your base salary sits relative to the higher-rate threshold. When comparing a bonus-heavy package against a higher base salary, the effective rate on each pound of bonus is the number that matters — not the gross figure.

Best next step

Use the bonus tax calculator to model your specific salary and bonus combination, then compare package structures in the salary vs bonus calculator. For the decision framework, read How to compare salary, bonus, pension, and job offers.