The best way to reward a key manager
A cash bonus can lose half or more to National Insurance and tax before it reaches your manager. See what the same budget gets them as a pension payment, a bonus swap or an electric car.
Your answer
Enter what the company will spend and your manager's salary to compare the ways to reward them.
About this calculator
For business owners who want to reward a key manager and get the most to them for the money. You enter what the company will spend a year; we show what reaches your manager as a cash bonus, a company payment into their pension, a bonus swapped into their pension, or an electric company car.
Each route is shown as pence reaching your manager for every £1 the company spends, best first, with the company's cost after Corporation Tax relief. We also point to share options and tax-free small gifts, which don't have a single figure.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
A cash bonus costs the company employer's National Insurance (15% of pay over £5,000), then your manager pays income tax, National Insurance and any student loan on it. We work it out on this year's rates with their salary as their only income.
A company payment into a pension has no income tax or National Insurance on either side, so all of it reaches the pension, but it's locked until at least 55 (57 from April 2028). A bonus swap (salary sacrifice) gives the same result if the company passes on its National Insurance saving. An electric company car is taxed on 4% of its list price; the company pays 15% Class 1A National Insurance on that, and the rest of the budget pays the lease.
Bonuses, pension payments, car leases and the National Insurance on them all come off the company's profits before Corporation Tax, so every route gets the same relief.
Worked example
Paid as a cash bonus, your manager keeps £5,838 of the £11,500 it costs the company (51p in each £1); paid into their pension, all £11,500 reaches them.
2026/27 tax year · England · manager's salary £50,000, their only income · no student loan · Corporation Tax 19% · NI saving passed on · car list price £45,000 · no Employment Allowance
| The company's budget | £11,500 |
|---|---|
| Cash bonus: employer's National Insurance (15% of pay over £5,000) | − £1,500 |
| Cash bonus: the bonus paid | £10,000 |
| Their income tax on it | − £3,946 |
| Their National Insurance on it | − £216 |
| Cash bonus: what they keep (51p in each £1) | £5,838 |
| Company pays into their pension: no income tax or National Insurance either side | £11,500 |
| Bonus swapped into their pension: £10,000 given up, plus the company's £1,500 National Insurance saving passed on | £11,500 |
| Electric car: taxed as if pay, 4% of £45,000 | £1,800 |
| Electric car: the company's Class 1A National Insurance on that (15%) | £270 |
| Electric car: the lease the rest pays for (£936 a month), less their £666 tax on it | £10,564 |
| Corporation Tax relief at 19% (profits up to £50,000), on every route | − £2,185 |
| The budget's real cost to the company | £9,315 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
Is a pension payment always better than a bonus?
Per pound, it almost always gets more to your manager, but it's not cash: they can't usually touch it until 55 (57 from April 2028), and it's taxed when they take it out, with a quarter usually tax-free. Someone saving for a house deposit may value cash more.
Does a bonus swap affect anything else?
It can. Pay given up can lower statutory maternity or paternity pay and some benefits, and some mortgage lenders look at pay after the swap. It has to be agreed before the bonus is earned.
What about giving them shares?
EMI share options can reward loyalty with no income tax or National Insurance when they're granted at the share's value. The value depends on the company's growth, so it's not compared here. Our calculator on giving key staff shares shows the tax.
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