Why a bonus over £100,000 can be taxed so heavily
A bonus only causes a problem because it is taxable income, and taxable income feeds your adjusted net income. Once that figure crosses £100,000 you start losing Personal Allowance — £1 for every £2 over — which is why a bonus in this zone can be taxed far more harshly than it first looks, at an effective rate near 60%.
This page compares your adjusted net income before and after the bonus for 2026/27, shows how close you are to the £100,000 line, and lets you test whether paying some of the bonus into a pension keeps you under it.
A bonus can push adjusted net income above £100,000 even if salary alone does not. The real question is the ANI gap after reliefs, not the bonus headline on its own.
How a bonus tips your income over £100,000
A bonus only matters here because of what it does to your Adjusted Net Income. Drop £5,000 on top of a £98,000 salary and you have crossed £100,000; the same bonus on £70,000 changes nothing about the taper. The deciding figure is always your total ANI once the bonus lands, not the size of the bonus on its own.
The bonus matters only because it changes ANI
This page isolates the before-and-after picture so you can see whether the bonus is what pushes you over £100,000 or whether you were already in the taper zone for another reason.
Measure the gap to £100,000, not just the size of the bonus
If you are already very close to the line, a small bonus can matter a lot. If you are well below it, the same bonus may not change the answer at all.
What can make the bonus matter more
- Existing ANI already near £100,000: a £98,000 base means a small bonus tips you over
- Taxable benefits and other income: a company car eats into the gap first
- Forgetting the taper uses ANI: it is ANI, not gross pay, that counts
What can soften the impact
- Qualifying gross pension contributions: route £5,000 of the bonus into a pension
- Grossed-up Gift Aid: £800 given is £1,000 off ANI
- Checking the true ANI gap first: measure the distance to £100,000, not the bonus size
Worked examples
These examples focus on the “did the bonus cause it?” question that most readers actually have.
Base pay £96,000, bonus £3,000
You may still stay under the line. If there are no other taxable amounts pushing ANI higher, the threshold might not be crossed.
Reassuring: not every bonus automatically triggers the taper.
Base pay £98,000, bonus £5,000
ANI can move above £100,000. A relatively modest bonus can be enough once it sits on top of already-high income.
The number that counts: your total ANI once the bonus lands.
Base pay £101,000, no bonus
The taper may already be live. Sometimes the bonus gets the blame when the ANI problem already existed.
Worth separating: the bonus effect from a baseline that was already high.
Base pay £99,000, bonus £6,000, pension contribution
You may be able to get back to around the line. A qualifying gross pension contribution can offset the ANI impact of the bonus.
Then what: once you know the gap, the planning question becomes much clearer.
What to do next if the bonus tips you over
These are the follow-up checks that usually matter once you know the bonus probably changed the threshold position.
Assuming the bonus alone caused the issue
Sometimes the bonus is only the visible piece. Taxable benefits, savings income or a pre-existing ANI above the line can already have started the taper.
Ignoring the relief side of the calculation
If the bonus pushes ANI only slightly over £100,000, a pension contribution can sometimes reverse the threshold outcome.
Compare the bonus page with the pension and ANI pages
That gives you the cleanest next-step answer: how far over the line you are, whether the bonus is really the trigger, and what gross pension amount might change the result.
Continue reading
Move to the connected pages that usually come next once the bonus question is answered.
Questions people usually ask
Will my bonus push me over £100,000?
It depends on how close your adjusted net income already is to the line. A bonus is added to taxable income, so even a modest bonus can tip you over if you are near £100,000.
Is a bonus over £100k taxed at 60%?
The bonus itself is not a special rate, but the part that takes you between £100,000 and £125,140 is effectively taxed at around 60% because you also lose Personal Allowance.
Does my bonus count towards adjusted net income?
Yes. A taxable bonus is part of your taxable income, so it feeds directly into adjusted net income.
Can I avoid the tax hit by paying my bonus into a pension?
Often, yes. Sacrificing or contributing part of the bonus into a pension lowers adjusted net income and can keep you under £100,000.
The payroll tax on my bonus looked huge — is that the final position?
Not necessarily. Payroll withholding can over- or under-estimate. The figure that matters for the taper is your adjusted net income across the whole tax year.
What if I was already over £100,000 before the bonus?
Then the bonus simply adds to income already in the taper, and the same roughly 60% effective rate applies to it until you reach £125,140.
| Primary source | How PayPrecise uses it | Link |
|---|---|---|
| Income Tax rates and Personal Allowance | Current £100,000 taper rule and endpoint. | View source |
| Adjusted net income guidance | ANI method used to test whether the bonus takes income over the line. | View source |
| Related threshold pages | Connected logic for pension and ANI follow-up pages. | View source |
This page is designed to give you a quick, transparent estimate. It is not personal tax advice, and it does not replace checking your exact HMRC position.