Thinking of rewarding a star player on your team with a bonus? Working out how much PAYE to deduct from bonuses or lump sums can be tricky but it’s all about choosing the right PAYE rate.

Bonus and lump sum payments can be things like annual or special bonuses, cashed-in annual leave, back-pay and retirementor redundancy payments. Overtime or any regular payments aren't considered lump sum payments.

How to work out the PAYE for lump sums
Follow these steps to work out the PAYE rate to use for a lump sum payment:

1. Work out what your employee has earned (before PAYE) over the past four weeks.
   
2. Multiply this figure by 13.
   
3. Add the lump sum payment to the figure in step two.
   
4. Use the table below to work out what income bracket your employee is in.
   
5. Deduct PAYE from the lump sum payment at the rate shown in the right-hand column for that income bracket.
   

Please find more information here