Bonus of £5,000 after tax

## Scenario

You receive a £5,000 gross bonus on top of your regular salary. How much of it actually reaches your bank account? The answer depends on your salary — because the bonus is taxed at your marginal rate, not a flat rate.

£5,000 bonus on a £35,000 salary (basic-rate taxpayer)

At £35,000, all your income including the bonus falls within the basic-rate band (which runs to £50,270):

| Deduction on the £5,000 bonus | Amount | |-------------------------------|--------| | Income tax (20%) | £1,000 | | Employee NI (8%) | £400 | | Net bonus received | £3,600 |

You keep £3,600 of the £5,000. The effective deduction rate is 28%.

£5,000 bonus on a £50,000 salary (near the higher-rate threshold)

At £50,000, you are £270 below the higher-rate threshold. The bonus pushes you into the 40% band:

| Deduction on the £5,000 bonus | Amount | |-------------------------------|--------| | First £270 at 20% tax + 8% NI | Tax £54, NI £22 | | Remaining £4,730 at 40% tax + 2% NI | Tax £1,892, NI £95 | | Net bonus received | £2,937 |

You keep £2,937 — just 59% of the headline figure. The bulk of the bonus is taxed at the higher rate.

£5,000 bonus on a £80,000 salary (fully in the higher-rate band)

At £80,000, the entire bonus falls in the higher-rate band:

| Deduction on the £5,000 bonus | Amount | |-------------------------------|--------| | Income tax (40%) | £2,000 | | Employee NI (2% above £50,270) | £100 | | Net bonus received | £2,900 |

You keep £2,900 — 58% of the gross bonus.

With a Plan 2 student loan

If you have a Plan 2 student loan, the bonus is also subject to 9% repayment above the Plan 2 threshold (£27,295). On a £35,000 salary:

| | Without student loan | With Plan 2 | |---|---------------------|-------------| | Net bonus | £3,600 | £3,150 | | Student loan deduction | — | £450 |

The student loan takes an additional £450, reducing the net bonus to £3,150 — just 63% of the gross.

Summary comparison table

| Base salary | Net bonus (no SL) | Net bonus (Plan 2) | You keep | |-------------|-------------------|-------------------|----------| | £35,000 | £3,600 | £3,150 | 63–72% | | £50,000 | £2,937 | £2,487 | 50–59% | | £80,000 | £2,900 | £2,450 | 49–58% |

What to notice

1. A bonus is not "extra" money in tax terms. It is added to your annual salary and taxed at whatever rate applies at the top of your income. There is no special bonus tax rate in the UK.

2. The threshold crossing matters. The biggest surprise comes when your base salary is near £50,270 and the bonus pushes you into the 40% band. This is where bonuses feel most heavily taxed.

3. Student loans add another 9%. Combined with 40% tax and 2% NI, a higher-rate taxpayer with a student loan loses 51% of the bonus to deductions.

Best next step

Try the bonus tax calculator for your exact salary. To compare whether a higher base salary would be better than a bonus, use the salary vs bonus calculator. The full explanation is in Bonus tax explained UK.