Is there a different level of tax for a loyalty bonus?

Adam_Humphrey

My boss has sold our company and has given everyone a "loyalty" bonus.

My question is will this have the standard 20% or is it less?

Someone in the office mentioned it was lower and I couldn't find anything online about it.

So I'm asking for some help to clear this up.

Thank you :money:

TrickyDicky101

As far as I know, you'll pay income tax at whatever your marginal rate is on the gross amount of the bonus (so, typically, that would be 20% if you are not a higher rate tax payer).

agrinnall

But it's possible that in the month it's paid it may take you into higher rate tax for that month. If that results in overpaid tax it'll probably be returned in your pay over the following months. Real figures would make it easier to give a better answer.

CLAPTON

it's treated exactly the same as salary
i.e.tax and NI are payable at usual rates

chrisbur

Possibly getting tax and NI mixed up; if the bonus takes you over the upper earnings limit for that payment some of the bonus would be at a lower NI rate.