What Happens If Your Bonus Pushes You Over £100,000 in England?

By Team SalaryCalculate · 7/21/2025

Hitting the £100,000 Mark: The Impacts on Your Bonus and Tax in England

Have you ever found yourself daydreaming about that delightful bonus, picturing the ways in which it will bring you over the £100,000 income it? While this fantasy is undeniably lovely, hitting the £100,000 thresholds could also bring certain taxable repercussions that you need to be aware of. With bonuses being a part of many people's annual income, it’s time for a deeper conversation about your paycheck.

Understanding your Bonus

Your bonus and your regular salary aren't two separate entities when it comes to paying tax. In fact, your bonus forms part of your taxable income, which means it's subject to the same tax rules as your basic earnings. Your paycheck's size in part determined by your tax threshold, and yes, this absolutely includes your bonus.

Why Your Bonus May Be Taxed at 40% or 45% or More

If you are lucky enough to earn over £100,000, the taxman also has reasons to be happy. Your income is taxed progressively in the UK, which means the more you make, the higher the tax rate you have to pay. You'll be waving goodbye to 40% of your income above £50,270 and a whopping 45% on earnings over £150,000.

But the journey becomes bumpy right after you cross £100,000. That's because for every £2 you earn over £100,000, you lose £1 of your tax-free personal allowance. This essentially means that the effective tax rate on the slice of income between £100,000 and £125,000 is a hefty 60%! Feel free to dive deeper into understanding [how your bonus may be taxed at 40% or 45% or more in England](https://salarycalculate.com/blog/bonus-tax-rate-explained-england) here.

Weighing Opting to Defer Your Bonus to The New Tax Year

Heard of the saying, "Don't count your chickens before they hatch"? It extends to bonuses too! It’s wise to consider the timing of receiving your bonus.

If your bonus throws your annual income over the £100,000 mark, you might want to talk to your employer about deferring your bonus until the new tax year begins. But is deferring always a savvy step?

While buying some time can help spread your income and potentially keep you below the mark, it’s not always beneficial to postpone your windfall. Various macroeconomic aspects such as inflation or changes in tax legislation could impact the value and tax implication of your bonus. Find out more on whether you [should defer your bonus to the new tax year in England](https://salarycalculate.com/blog/defer-bonus-england) here.

Know Your Net Pay Quick and Easy

It's a no-brainer that understanding your net pay is key to financial literacy. Having an idea of your net salary, after taxes and deductions, helps you plan and organise your finances in a much more informed way. Managing your earnings, investments and outgoings can become much less daunting when you have a clear picture of what you're really taking home.

Use this net salary calculator to check out your take-home pay in seconds.

To Wrap Up

Breaking the £100,000 threshold is certainly reason to celebrate, but make sure you're informed about the potential tax implications to keep the taxman's share in check. It's always a good idea to measure twice and cut once when it comes to your hard-earned cash. Stay informed, make smart choices, and keep dreaming about those bonuses!

FAQ

Does reaching £100,000 income threshold means paying more tax?

Yes. Above £100,000, you lose £1 of your standard tax-free personal allowance for every £2 you earn. This means from £100,000 to £125,000 your effective tax rate could actually be 60%.

Should I always defer my bonus to the next tax year?

Not always. While deferring could potentially reduce your taxable income for this financial year, factors like inflation or changes in tax legislation can impact the value and tax liability of your bonus in the next year. It's best to talk to a financial advisor about your specific circumstances.

How is a bonus taxed as compared to salary?

In the UK, bonuses are treated as regular income by tax authorities. This means they are subject to the same tax rates as your salary and counted as part of your overall income for the tax year.

How Bonuses Are Taxed in England (2024/25)

Bonuses are a great way to be rewarded for your hard work—but before you celebrate, it’s important to understand how they’re taxed. In England, bonuses are treated just like regular income, meaning they’re subject to Income Tax and National Insurance. The exact amount you take home depends on your total earnings for the year, your tax code, and even the month your bonus is paid.

Bonus Tax Calculator for England – How Much Will You Keep?

Bonuses are exciting—but before you plan how to spend yours, it’s worth asking: how much will actually reach your account? In England, bonuses are taxed just like your salary, meaning your take-home might be less than expected. That’s why a bonus tax calculator is so useful. By adding your bonus to your total income, HMRC determines your tax bracket. If your bonus pushes your income into a higher bracket, a larger portion is taxed at a higher rate—potentially up to 40% or even 45%. Plus, National Insurance still applies.

Why Your Bonus May Be Taxed at 40%, 45% or More in England

Bonuses in England are taxed just like your salary—meaning they can push you into higher tax bands. If your bonus lifts your total income above £50,270, you’ll be taxed at 40%. Over £150,000? That jumps to 45%. And if your income crosses £100,000, you start losing your personal allowance—effectively pushing your tax rate on part of your income to nearly 60%.