A €1,000 bonus in Ireland rarely lands as €1,000, and the shortfall is bigger than most payslips make obvious. On a €45,000 salary you keep about €528 of it, 52.8%, because a bonus sits on top of income you have already earned and is charged at your marginal rate rather than your average one (the two-rate distinction itself is covered fully in how much tax you pay at every salary). What this page adds is the part a general tax explainer cannot: why the deduction on the actual payslip for the month a bonus is paid so often looks worse than that annual percentage, and what genuinely reduces it.
All figures come from the IrishPAYE bonus tax calculator on Budget 2026 rates for a single employee aged 35 on standard credits. The pattern below holds at any bonus size, so €1,000 is used to keep the percentages easy to read.
How much of a €1,000 bonus you keep (2026)
| Salary | You keep | Tax takes | Kept % | Marginal rate |
|---|---|---|---|---|
| €30,000 | €728 | €272 | 72.8% | 27.24% |
| €45,000 | €528 | €472 | 52.8% | 47.24% |
| €60,000 | €528 | €472 | 52.8% | 47.24% |
| €80,000 | €478 | €522 | 47.8% | 52.24% |
| €100,000 | €478 | €522 | 47.8% | 52.24% |
Why your bonus payslip can look worse than this table
The table above answers an annual question: over the whole year, how much of the bonus do you end up keeping. Your payslip answers a different question, for one period only, and PAYE and USC are charged on the cumulative basis: at each payday, Revenue's rules test your pay so far this year against the tax credits and cut-off banked so far this year, not against the full annual figures. In the month a bonus is paid, the cut-off banked so far is only that many twelfths of the annual one. A large bonus can burn through that twelfth-share and get taxed at 40% on the day, even though your salary for the whole year would comfortably sit under the annual cut-off shown in this page's table. Payroll does not lose that money: it returns the difference over your remaining payslips for the year, which is why a bonus paid in, say, April can leave several months of slightly higher take-home behind it as the correction plays out. The mechanism behind this, applying to every payment and not just a bonus, is explained fully in how the cumulative basis works; this page is only about what it does to a lump sum specifically.
Nothing about this means the table is wrong or that your employer has made an error. Both figures are correct answers to different questions, one for the year and one for a single pay date, and reading a heavy one-off deduction as proof of an overcharge is the single most common misunderstanding about bonus payslips. If you want to check one payslip line by line rather than compare it to an annual average, the payslip checker is built for exactly that.
When Week 1 or emergency tax makes it worse again
There is a second, separate reason a bonus payslip can look punishing: which basis your pay is being taxed on. On the normal cumulative basis, described above, a bonus is taxed correctly on day one, even if the deduction looks steep against the annual table. On a Week 1 or Month 1 basis, which is common in your first payslip or two at a new job, or whenever emergency tax applies, each pay period is taxed in isolation, using only that period's own slice of your credits and cut-off with no reference to the rest of the year. A bonus landing in a period taxed this way is over-taxed on top of the cumulative effect above, because the small single-period allowance has none of the flexibility the full-year figure gives it.
That extra tax is not gone. It comes back once your employer is applying the normal cumulative basis, usually after a correct Revenue Payroll Notification is in place, or at an end-of-year review if the year has already ended by then. The practical takeaway is the same either way: a heavily taxed first bonus at a new job is a timing problem, not a permanent one.
Reducing what tax takes from a bonus
You cannot avoid PAYE, USC and PRSI on cash paid as a bonus, but two arrangements genuinely change the outcome, and both have to be set up before the money is paid rather than claimed after.
- Route it into your pension. A bonus paid as an additional voluntary contribution attracts income tax relief at your marginal rate, within your age-related percentage limit. USC and PRSI are still charged on the full amount either way; only the income tax portion is relieved. The rules and limits are covered fully at pension tax relief.
- Take part of it as a non-cash benefit. Under the Small Benefit Exemption, an employer can give up to five non-cash benefits a year worth up to €1,500 combined, completely free of PAYE, USC and PRSI. The benefit cannot be cash or convertible to cash, unused allowance does not carry into the following year, and if a single benefit exceeds the limit, the whole of it becomes taxable rather than just the excess.
Neither option works retroactively on cash already paid into your bank account: both have to be agreed with payroll before the bonus is processed.
A worked example: a €2,000 bonus in December
On a €60,000 salary, a real €2,000 bonus leaves you about €1,055, with the remaining €945 going to PAYE, USC and PRSI over the year as a whole. That is the number that matters for your annual finances, and it is what the bonus tax calculator will show you for your own salary and bonus size.
The December payslip itself tells a narrower story. By the last month of the year almost all of the annual cut-off has already been banked through the previous eleven payslips, so a bonus landing this late is the case least likely to trigger the twelfths problem described above: there is little cut-off left unused for it to spill past, and little of the year left for payroll to correct anything through. A bonus paid much earlier in the year, when far less of the annual cut-off has been banked yet, is the case most likely to look alarming on the day, precisely because there is more room for it to run past what has accumulated so far and more months left over which the correction gets spread out. Same annual arithmetic, different payslip story, purely down to when in the year the money lands.
What people get wrong about bonus tax
Reading the payslip deduction as the whole story. The figure a payslip shows for one bonus payment is a single data point in a cumulative system that corrects itself across the year; it is not, on its own, evidence that you have been overcharged or undercharged.
Assuming this page's standard assumptions match their own certificate. This table uses the standard cut-off and credits for a single person. If your own Tax Credit Certificate carries a different cut-off, which is common for anyone with additional credits or a transferred band, the real deduction on your bonus will differ from the table. The bonus calculator has a "use my own tax credits and cut-off" option for exactly this.
Not asking about the Small Benefit Exemption in time. It has to be arranged with payroll before the bonus is paid; there is no way to reclassify cash that has already landed in your account as a tax-free benefit afterwards.
Confusing a bonus with a permanent raise. A bonus is a one-off; it does not move your ongoing marginal rate the way a salary increase does. If it is in fact a permanent change to your pay, the pay rise calculator is the right tool, not this one.
Check your own bonus
Enter your salary and bonus size in the bonus tax calculator for the annual answer, or use the payslip checker to verify one specific payslip against your own year-to-date figures rather than a general table. If the extra pay is recurring rather than a single payment, see how much of your overtime you keep instead, which covers the recurring-hours case this page deliberately leaves out.
Frequently asked questions
How much of my bonus do I keep in Ireland?
It depends which band the bonus lands in. On a €45,000 salary you keep about €528 of a €1,000 bonus, 52.8%, while on €30,000 you keep about €728, 72.8%. That is the annual answer; the figure on your actual payslip for the month the bonus is paid can look worse, for reasons this page covers.
Why does my bonus payslip show a bigger deduction than this page's table?
Because PAYE and USC are charged on the cumulative basis. In the month a bonus is paid, your cut-off used so far is only that many twelfths of the annual figure, so a large bonus can be taxed at 40% on the day even though your whole year stays under the annual cut-off. Payroll gives the difference back over the remaining months, so the payslip deduction and this page's annual percentage are both correct, they are just answering different questions.
Is a bonus taxed differently from overtime in Ireland?
Not in the rate applied, both are taxed at your marginal rate with no special rate of their own. The difference is timing: a bonus is one large payment that can outrun the cut-off banked so far in that month, where recurring overtime adds a small amount each period and rarely does. See how much of your overtime you keep.
How can I reduce the tax on my bonus?
Two options genuinely help. Route some or all of it into your pension for income tax relief at your marginal rate, within your age-related limit; USC and PRSI are still charged on the full amount. Or ask your employer to structure part of it as a non-cash benefit under the Small Benefit Exemption, up to €1,500 a year across five benefits, completely free of PAYE, USC and PRSI.
What is the Small Benefit Exemption and does it help with a bonus?
It lets an employer give up to five non-cash benefits a year, worth up to €1,500 combined, free of PAYE, USC and PRSI. It cannot be cash or convertible to cash, unused allowance does not carry into the next year, and going over the limit on a single benefit makes the whole of it taxable, not just the excess. It has to be arranged with your employer before payment; it is not something you can elect on already-paid cash.
I started a new job and my bonus was taxed heavily on a Week 1 basis, why?
On the normal cumulative basis a bonus is taxed correctly straight away. On a Week 1 or Month 1 basis, common after starting a new job or while emergency tax applies, each pay period is taxed in isolation using only that period's own share of your credits and cut-off, so a bonus paid during one is over-taxed. It is not lost: it is returned once you move to the cumulative basis or at an end-of-year review.
Does a big bonus push me into a higher tax bracket permanently?
No. Ireland's system is marginal, so only the portion of income above each threshold is taxed at the higher rate, and that applies for the year the bonus is paid in, not permanently. The mechanics of marginal versus effective rates are covered in how much tax you pay at every salary.
Will I get back the extra tax deducted from a bonus?
If the deduction was higher than your annual figures justify, most likely yes, either automatically in a later payslip as your cumulative cut-off catches up, or at an end-of-year review. To check one specific payslip rather than the annual table on this page, use the payslip checker.