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Tax on a bonus in Ireland
See how much of a once-off bonus you actually keep after income tax, USC and PRSI — taxed at your marginal rate, using Budget 2026 bands.
| Income tax on bonus | €2,000 |
| USC on bonus | €150 |
| PRSI on bonus | €210 |
| Bonus kept 52.8% of bonus | €2,640 |
A €5,000 bonus on a €50,000 single salary is taxed at about 47.2%, so you keep roughly €2,640 after income tax, USC and PRSI in 2026.
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How tax on a bonus works in Ireland (2026)
A cash bonus is treated as ordinary pay, so it is taxed at exactly the same rates as your salary. The catch is that it sits on top of your earnings, so it is usually all taxed at your highest (marginal) rate. For most full-time employees already over the standard-rate cut-off, every euro of bonus is hit by:
| Charge | Marginal rate |
|---|---|
| Income tax (PAYE) | 40% |
| USC (€28,700–€70,044 band) | 3% |
| PRSI (Class A) | 4.2% |
| Total marginal deduction | ≈ 47.2% |
This calculator does it precisely: it works out your tax with and without the bonus, and the difference is the true tax on the bonus — so it also handles cases where part of the bonus is still in the 20% band or a lower USC band.
Tip: a cash bonus is fully taxable, but employers can give limited non-cash benefits (e.g. vouchers) tax-free under the Small Benefit Exemption. To see your base take-home, use the net salary calculator.
Worked examples — what you keep of a bonus
| Bonus | On a €45,000 salary (40% band) | On a €35,000 salary (20% band) |
|---|---|---|
| €1,000 | keep €528 | keep €728 |
| €5,000 | keep €2,640 | keep €3,640 |
| €10,000 | keep €5,280 | — |
Above the €44,000 single band a bonus loses 40% income tax + 3% USC + 4.2% PRSI (≈47.2%), so you keep about 52.8 cents per euro. In the 20% band you keep about 72.8 cents per euro. A pension contribution from the bonus can save much of the tax — see the pension tax relief calculator.
How to pay less tax on your bonus in Ireland
A cash bonus is fully taxable, but there are two legitimate ways Irish employees and employers reduce the tax bill:
1. Put the bonus into your pension (AVC)
Redirecting a bonus into your pension as an Additional Voluntary Contribution (AVC) earns income-tax relief at your marginal rate — up to 40%. So each €1 you contribute saves up to 40 cent of income tax.
Important — the honest detail most calculators skip: an AVC only relieves income tax. USC (up to 8%) and PRSI (4.2%) are still due on the amount, unless your employer runs a structured salary-sacrifice or makes the contribution as an employer contribution. So a €5,000 bonus routed to an AVC typically saves the 40% income tax but not the ~12% USC + PRSI.
Relief is capped by your age-related limit and an earnings cap of €115,000:
| Age | Max % of earnings with relief |
|---|---|
| Under 30 | 15% |
| 30–39 | 20% |
| 40–49 | 25% |
| 50–54 | 30% |
| 55–59 | 35% |
| 60+ | 40% |
See exactly what a contribution saves with the pension tax relief calculator.
2. Take part of it as a tax-free voucher (Small Benefit Exemption)
Under the Small Benefit Exemption, your employer can give you up to €1,500 a year in non-cash benefits (across a maximum of 5 benefits) completely free of PAYE, USC and PRSI. A voucher for that amount lands in full — versus roughly €720 kept if the same €1,500 were paid as a cash bonus at the 52% marginal rate. The benefit must be non-cash and can't be exchanged for cash.
Source: Revenue — Small Benefit Exemption.
People also ask
How much tax do I pay on a bonus in Ireland?
At the marginal rate — typically 40% income tax + 3% USC + 4.2% PRSI ≈ 47.2%. A €5,000 bonus then nets about €2,640.
Is a bonus taxed more than salary?
Same rates, but because it stacks on top of your salary it is usually all taxed at your top rate, so the kept percentage looks lower than your average rate.
Can a bonus be tax-free?
A cash bonus is fully taxable. Non-cash benefits like vouchers can be tax-free up to the annual Small Benefit Exemption limit.
How can I reduce the tax on my bonus in Ireland?
The two main routes are: pay it into your pension as an AVC (income-tax relief at up to 40%, though USC and PRSI still apply), or take up to €1,500 a year as a tax-free non-cash voucher under the Small Benefit Exemption.
Can I put my bonus into my pension to avoid tax?
Yes — an AVC gives income-tax relief at your marginal rate (up to 40%), within your age-related limit and the €115,000 earnings cap. It does not remove USC (up to 8%) or PRSI (4.2%) unless it's a structured employer salary-sacrifice arrangement.
Are bonus vouchers taxed in Ireland?
No, up to €1,500 a year. Under the Small Benefit Exemption an employer can give up to five non-cash benefits totalling €1,500 free of PAYE, USC and PRSI. Anything above that, or any cash, is taxed normally.
Related Ireland calculators
Sources: revenue.ie, Budget 2026 (gov.ie). Estimates for planning only — not tax advice. Verify your position with Revenue or a qualified adviser.