One of the best ways to save on paying taxes is to put your bonus into your pension through a “bonus sacrifice”.
Because bonuses are taxed in the same way as regular income, you will need to pay 40% taxes also on the bonus, or £400 in taxes! How can I avoid paying tax on my bonus UK? Now let’s say that you received an annual bonus of £1,000. Say that you make £50,000 a year, putting you in the tail end of the higher tax bracket, paying income tax at 40%. How much are bonuses taxed UK? Calculating the exact taxes you owe can be tricky, but we can provide you with an example to make it easier to understand. Are bonuses always taxed at 22%?įor people who earn between £12,570 and £50,270, the income you earn, including bonuses, will be taxed at 20%, making national insurance contributions at 12%. If you are a higher income earner even after retirement, see what options you have for pension tax relief for high earners.
If you earn between £50,270 and £100,000, your income, including any bonuses, will be taxed at 40%.
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