Bonus season: sacrificing a bonus to stay under £100,000

For many parents a bonus is what tips adjusted net income over £100,000, often in the last months of the tax year. Putting part of it into your pension, called bonus sacrifice, can keep you under the limit.

How it works

You give up some or all of the bonus, and your employer pays the same amount into your pension instead. Because you never receive it as pay, it doesn't count towards your adjusted net income, and you pay no income tax on it. Until April 2029 there's no National Insurance on it either.

How much to sacrifice

Only as much as you need: the amount your expected adjusted net income for the whole tax year is over £100,000, plus a small margin. Count salary, the bonus, taxable benefits and savings interest, less your other pension contributions. Work it out, or use the planner: with "Take it from" set to "Bonus first", it splits the top-up between your bonus and monthly pay and writes the email to payroll.

When to ask

• Ask before the bonus is paid. A sacrifice can't be backdated: HMRC expects the change to your pay to be agreed before it takes effect.
• Many employers set a deadline for bonus sacrifice requests, so ask HR or payroll early.
• Check whether your employer allows bonus sacrifice at all, and whether it passes on any of its National Insurance saving.

If bonus sacrifice isn't available

You can pay into a personal pension instead, by 5 April. You pay 80% and the provider adds 20% tax relief; the gross amount lowers your adjusted net income. Claim the rest of the relief through Self Assessment or by contacting HMRC.

Things to check

• Life cover and some other benefits can be based on your pay after the sacrifice, and a mortgage lender may look at it too.
• Your take-home pay in the bonus month will be lower than the bonus suggests, by design.
• From April 2029, salary and bonus sacrifice above £2,000 a year will pay National Insurance. More on the 2029 change.

More guides

• How much pension to get under £100,000: calculator

  Work out how much more to pay into your pension to bring adjusted net income back to £100,000, and what it costs.

• 60% tax trap calculator

  See how much of your income is taxed at 60%, what the lost Personal Allowance costs and how much pension gets you out.

• The 60% tax trap between £100,000 and £125,140

  Why income between £100,000 and £125,140 is taxed at 60%, and how pension contributions get you out of it.

• Losing funded childcare at £100,000

  How 30 funded hours and Tax-Free Childcare stop when either parent goes over £100,000, and what stays.

• Salary sacrifice, net pay and relief at source

  The three ways pension contributions are made, and how each one lowers your adjusted net income.

• The High Income Child Benefit Charge

  How Child Benefit is clawed back between £60,000 and £80,000, and why you should still claim.

• What is adjusted net income?

  The income figure behind the £100,000 childcare limit, the Personal Allowance taper and the Child Benefit charge.

• Budget 2026: what it means for parents near £100,000

  What the 28 October 2026 Budget changed, and didn't, for families around the £100,000 childcare limit.

• Salary sacrifice from April 2029: the £2,000 National Insurance cap

  From April 2029 only £2,000 a year of pension salary sacrifice is free of National Insurance. Why it still keeps you under £100,000.

Sources

• Salary sacrifice and the effects on PAYE (GOV.UK)
• Tax relief on pension contributions (GOV.UK)
• Changes to salary sacrifice for pensions from April 2029 (HM Treasury)

Checked 31 October 2026 for England. This guide is general information, not financial advice.