Is a bonus taxed at a special rate?

No. A bonus is ordinary pay, taxed at your top rates. Above the 20% band that means 40% income tax, 3% or 8% USC and 4.35% PRSI (from 1 October 2026). So about half is kept.

Why was so much tax taken from my bonus payslip?

On the cumulative basis, your employer only has the credits and 20% band for the months so far. A large bonus early in the year can push more of that month's pay into 40% than it will be over the full year. The extra comes back in your following payslips.

Can I put my bonus into my pension?

Yes, as an additional voluntary contribution (AVC) through payroll. It gets income tax relief at your top rate, within a limit by age: 15% of earnings under 30, up to 40% from 60, on earnings up to €115,000. USC and PRSI are still charged on it.

Pay

Bonus tax calculator

How much of a bonus you keep after tax, what that month's payslip will show, and what paying some into your pension saves.

Self-assessment tool. The figures come from your own answers. It isn't advice, and you're responsible for what you file or claim. heypenny.ie is a trading name of Kinch Press. Read the disclaimer.

Common questions

Is a bonus taxed at a special rate?: No. A bonus is ordinary pay, taxed at your top rates. Above the 20% band that means 40% income tax, 3% or 8% USC and 4.35% PRSI (from 1 October 2026). So about half is kept.
Why was so much tax taken from my bonus payslip?: On the cumulative basis, your employer only has the credits and 20% band for the months so far. A large bonus early in the year can push more of that month's pay into 40% than it will be over the full year. The extra comes back in your following payslips.
Can I put my bonus into my pension?: Yes, as an additional voluntary contribution (AVC) through payroll. It gets income tax relief at your top rate, within a limit by age: 15% of earnings under 30, up to 40% from 60, on earnings up to €115,000. USC and PRSI are still charged on it.

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