Do the bonus tax calculator maths yourself. What PAYE takes from a big commission month in 2026/27, why NI barely touches it, and how to keep more.
Every commission earner has had the same moment. The deal closes, the accelerator kicks in, you know roughly what the gross number is, and then the payslip lands and the net is smaller than the mental arithmetic you did in the car park.
Most of the writing about this explains the shock after the fact. This one is meant to be used before payday. Run the bonus tax calculator maths yourself in about five minutes, and you will know what is coming, which parts of it are permanent, and which parts PAYE quietly hands back later.
Three deductions, and they behave completely differently from each other.
Income tax is cumulative. Your payroll system looks at everything you have earned so far this tax year, works out the tax due on that running total, subtracts what you have already paid, and charges the difference this month. That single design choice explains almost every bonus month surprise.
National Insurance is not cumulative. It is worked out fresh each pay period against monthly thresholds: nothing below £1,048, 8 per cent between £1,048 and £4,189, and 2 per cent above £4,189. A bonus dumps most of its value into that top 2 per cent slice.
Pension comes off under its own rules, either before tax under salary sacrifice or net pay, or after tax under relief at source.
So the honest answer to “how much of my bonus will I keep” depends on where the money lands in the year, not just how big it is.
Say your base is £38,000, so £3,166.67 a month, and an £8,000 commission payment lands in September, which is month 6 of the 2026/27 PAYE year. You are on 1257L, cumulative, no pension for now so the numbers stay readable.
Month 6 gross is £3,166.67 plus £8,000, so £11,166.67.
Income tax. By month 6 your year to date gross is £27,000. Payroll gives you half a year’s personal allowance, £6,285, so taxable pay to date is £20,715. It also gives you half a year’s basic rate band, £18,850. That means £18,850 gets taxed at 20 per cent, which is £3,770, and the remaining £1,865 gets taxed at 40 per cent, which is £746. Year to date tax due: £4,516.
You had already paid £2,119.17 across months 1 to 5. So the month 6 deduction is £2,396.83.
Compared with the £423.83 you would normally pay in a month, the bonus attracted £1,973 of income tax. That is 24.7 per cent, not 20, because £1,865 of it hit the higher rate band.
National Insurance. On £11,166.67: 8 per cent on the £3,141 between £1,048 and £4,189 is £251.28, and 2 per cent on the £6,977.67 above £4,189 is £139.55. Total £390.83. A normal month costs you £169.49. So the £8,000 bonus attracted £221.34 of National Insurance, which is 2.8 per cent.
That is the part nobody expects. National Insurance is the gentlest tax on a spike month, by a distance.
Net on the day: £8,000 minus £1,973 minus £221 is about £5,806, or 72.6 per cent.
Your annual pay in that example is £46,000. That is comfortably below the £50,270 higher rate threshold. You are not a higher rate taxpayer and you never were.
The £1,865 charged at 40 per cent in September was a timing artefact. As months 7 to 12 arrive and your cumulative allowance and basic rate band keep growing while your pay returns to normal, payroll recalculates and gives the overcharge back, a slice at a time, through your ordinary payslips. By month 12 your total income tax for the year settles at £6,686, exactly 20 per cent of £33,430.
So the real, permanent cost of that £8,000 bonus is £1,600 of income tax and £221 of National Insurance. You keep £6,179, or about 77 per cent. It just does not feel like it in September.
Two things break this pattern, and both are worth checking:
There is one salary band where the maths turns properly hostile, and high performing sales people hit it more often than most.
Once your adjusted net income passes £100,000, your personal allowance tapers away at £1 for every £2 you earn above it, and it is gone entirely at £125,140. Losing allowance while paying 40 per cent on the earnings that caused the loss produces an effective marginal rate of 60 per cent across that £25,140 stretch.
If a commission month is the thing that pushes you from £95,000 to £110,000 for the year, roughly £10,000 of that is being taxed at 60 per cent. This is the single strongest argument for planning a big month in advance rather than reacting to it.
Salary sacrifice on a bonus is unusually efficient, for a reason that follows directly from the National Insurance maths above.
Back to the £38,000 and £8,000 example. Suppose you ask payroll, in writing and before the payment is contractually due, to divert £4,000 of the bonus straight into your workplace pension.
£4,000 in your pension for £3,120 of net pay. Your employer also stops paying employer National Insurance at 15 per cent on that £4,000, which is £600, and a fair number of employers now pass some or all of that into the pension too. Ask, because it is rarely advertised.
On your September payslip the tax saving will look bigger than £800, closer to £1,173, because the sacrifice also removes the slice that was going to be charged at 40 per cent. Only £800 of that is a real saving. The rest you were getting back anyway.
Two rules that matter: the sacrifice has to be agreed before you become entitled to the payment, and it cannot take your pay below the National Minimum Wage. Retrospective sacrifice does not work, so the conversation with payroll happens when the commission is calculated, not when it is paid.
If you would rather not do this on paper every quarter, the NetPay app models a bonus month against your real year to date figures, including pension, student loan, and salary sacrifice, so you can see the September number and the March number side by side. Free to download.
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NetPay does this maths for every shift, invoice and payslip, automatically.
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For most basic rate earners in 2026/27, roughly 75 to 80 per cent of a bonus survives once income tax and National Insurance come off. The figure you see on the bonus payslip is often lower than that, because a cumulative tax code charges some of the bonus at 40 per cent in the month it lands and then refunds the difference over your remaining payslips.
Employee National Insurance is worked out separately for each pay period rather than cumulatively. In a bonus month most of the extra pay sits above the monthly upper earnings limit of £4,189, where the rate drops from 8 per cent to 2 per cent. So a large one-off payment attracts very little National Insurance compared with the same money spread across the year.
It usually is if the sacrificed slice sits above the monthly upper earnings limit, because you save income tax at your marginal rate plus only 2 per cent National Insurance, and your employer saves 15 per cent employer National Insurance which some firms pass into your pension. Sacrificing £4,000 of a bonus as a basic rate taxpayer typically costs about £3,120 of take-home pay.
Only if your total pay for the whole tax year crosses £50,270. A single big month can trigger 40 per cent tax at the time under a cumulative code, but if your annual total stays in basic rate, PAYE gives that money back automatically through later payslips. Check your year to date figures rather than one payslip.
Want to see your actual take-home pay?
NetPay UK works out your real net pay after tax, NI, pension and salary sacrifice, for hourly, shift and variable-income workers. Free to download.
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A note on financial advice: NetPay UK calculates take-home pay based on official HMRC tax rules. This article reflects rules in force at the time of publication (17 August 2026). Tax rules change. For complex situations, consult a qualified UK accountant or visit gov.uk/income-tax.
