Tax on Bonus Payment Query

DavidRoy51

Hi all, 

My employment end date is the 31st Jan 2026 and I will be paid my final salary and the 2025 year bonus as one final payment. 

In order to avoid paying more tax in the 40% bracket, does it make sense to ask for my job end date to be 1st February and for my bonus to be paid in February's payslip. It would act as a salary payment for the month. But in doing this, would I avoid paying more tax?
 
I already have a salary sacrifice scheme that I cannot amend in case someone suggests this.

Thanks.

Dazed_and_C0nfused

DavidRoy51 said:

Hi all, 

My employment end date is the 31st Jan 2026 and I will be paid my final salary and the 2025 year bonus as one final payment. 

In order to avoid paying more tax in the 40% bracket, does it make sense to ask for my job end date to be 1st February and for my bonus to be paid in February's payslip. It would act as a salary payment for the month. But in doing this, would I avoid paying more tax?
 
I already have a salary sacrifice scheme that I cannot amend in case someone suggests this.

Thanks.

Ultimately it makes absolutely no difference whether you are paid it at the end of January or the end of February.

DavidRoy51

Thank you.
In case it makes a difference, other than seeking my bonus in the month of February, I won't have employment for the remainder of the tax year.

Mutton_Geoff

DavidRoy51 said:

Hi all, 

My employment end date is the 31st Jan 2026 and I will be paid my final salary and the 2025 year bonus as one final payment. 

In order to avoid paying more tax in the 40% bracket, does it make sense to ask for my job end date to be 1st February and for my bonus to be paid in February's payslip. It would act as a salary payment for the month. But in doing this, would I avoid paying more tax?
 
I already have a salary sacrifice scheme that I cannot amend in case someone suggests this.

Thanks.

No difference as it's still in same tax year.

Actual tax for 2025/26 depends on whether you will work/have more earnings after Jan 26.

You can always pay into your own SIPP for tax benefits provided you don't exceed the AA inc any carry forward amounts.

chrisbur

If you are suggesting that instead of one payment of salary plus bonus being paid it is split over two pay months so one for salary one for bonus then; no difference to tax as advised, but would result in a difference to the national insurance. This could increase or decrease the NI you pay depending on the figures involved.

DavidRoy51

Thank you all for your comments.
Thinking of responses to your replies, I thought of one useful feature through splitting the payments.
I can make a £1000 salary sacrifice per month to my pension. Having my salary paid in January but the bonus in February will allow me to make two £1000 salary sacrifice contributions. This should conclude splitting as the better outcome.